Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

DEATH OF A MEMBER

Mr. Speaker: I regret to have to inform the House of the death of Sir Harry Legge-Bourke, K.B.E., Member for Isle of Ely, and I desire on behalf of the House to express our sense of the loss we have sustained and our sympathy with the relatives of the hon. Member.

PRIVATE BUSINESS

UPPER MERSEY NAVIGATION BILL [Lords]

Read the Third time and passed, with amendments.

Oral Answers to Questions — POSTS AND TELECOMMUNICATIONS

Postal and Telephone Charges

Mr. Rost: asked the Minister of Posts and Telecommunications whether the proposed increases in charges for postal services, as notified to his Department, will comply with the Government's counter-inflation policy, phase 2; and why the recent increased telephone charges as a result of the introduction of VAT have not allowed for the abolition of selective employment tax.

The Minister of Posts and Telecommunications (Sir John Eden): Under the Price and Pay Code the Post Office may apply to the Price Commission for increases in postal tariffs in line with the increase in its allowable costs, but no such application has been made. As to the second part of the Question, the telephone service did not pay selective employment tax.

Mr. Rost: Will my right hon. Friend confirm that with each of the past two price increases for postal services there has been a resulting drop in volume and use of the facilities, which has not been recovered subsequently? Does it make commercial sense to increase postal charges again by a proposed 20 per cent.,


which will only price more postal services out of the market?

Sir J. Eden: I am sure that the Post Office will have considered the point raised by my hon. Friend. I cannot comment on the figure of 20 per cent. or any other figure of that kind.

Mr. Gregor Mackenzie: Does the Minister recall that we raised this matter during the Committee stage of the Post Office Bill and that I asked him then, as I ask him again today, whether he has thought in terms of giving any compensation to the Post Office because of the effects of the phase 1 and phase 2 policies? Will he tell the House whether he has been thinking about this, rather than just a straight increase in postal charges?

Sir J. Eden: As the hon. Member knows, that matter has been and still is under consideration by my right hon. Friend the Chancellor of the Exchequer in relation to the position of all nationalised industries.

Concessionary Television Licences

Mr. Tinn: asked the Minister of Posts and Telecommunications if he will make a statement on the reasons for the withdrawal of concessionary television licences for groups of elderly people supervised by voluntary wardens within the voluntary warden scheme and the social services department of the Teesside County Borough.

Sir J. Eden: None has been withdrawn but some are being reviewed because it seems possible that they may have been issued to people not eligible for them.

Mr. Tinn: It would seem that some people have been receiving the benefit outside the scope of the regulations, but if that is so it serves only to illustrate once again the anomalies created by the regulations. Will the Minister reconsider the matter and appreciate that nothing more incenses pensioners than the fact that those who are living in local authority sheltered accommodation receive such a valuable concession while those less fortunately placed do not?

Sir J. Eden: I fully understand the points made by the hon. Member and, of course, I also accept that strong feelings are aroused by the position as he has

described it. However, the anomalies to which he refers arise out of the situation which was created to overcome even worse anomalies, and I am concerned to ensure that if there were to be any change it would not make the position even worse. It is therefore probably right to leave things as they are at the present time.

Mr. Harper: Surely, as my hon. Friend said, so many anomalies are created by this concessionary licence for old people living in warden accommodation, and so much bitterness is caused, that the only way to tackle the matter is to abolish television licences altogether in this context, or give free licences and recoup the lost revenue from other sources.

Sir J. Eden: I am sure that the hon. Member recognises that his suggestion raises much wider issues. However, it would be helpful in operating the present scheme if, before people were informed about their eligibility for the cheap licence, the conditions were carefully examined and related to the terms of the licence.

Mr. Radice: asked the Minister of Posts and Telecommunications what representations he has received from the Edmondsley Parish Council on cheap television licences for the aged; and what reply he has sent.

Sir J. Eden: A petition asking for half-price television licences for aged people.
My reply has explained that it is not Government policy to grant licence concessions to particular groups of people, but, instead, to help the needy by giving them cash through the social security system.

Mr. Radice: Is the Minister aware that the petitioners of Edmondsley are speaking for the majority of old people when they ask for cheap television licences for old-age pensioners? Is he aware that television has become so important in the lives of many old people that pressure for action on the matter will continue until either the Government give way or pensions are raised to a reasonable level? Will the right hon. Gentleman change his mind?

Sir J. Eden: No, Sir. I think that the hon. Gentleman will equally well recognise the enormous amount of real and


practical help that the present Government have given to elderly people.

Disabled Persons (Services)

Mr. Pavitt: asked the Minister of Posts and Telecommunications if he will issue a general direction to the Post Office that special consideration should be given to the availability of services for the disabled.

Sir J. Eden: No, Sir. The Post Office already does what it can to meet the special needs of the disabled.

Mr. Pavitt: I am grateful to the Minister for writing to me so fully on this subject, and to his Department for probing it. Is the right hon. Gentleman aware that in 1964, when I raised the question of the charge made to the deaf for the transistorised handset, the Labour Government reduced it by 33⅓ per cent.? For the rest of the telephone service the Post Office has an equalisation system under which the subscriber is charged the same amount whether he lives in the outer Hebrides or London? Why, therefore is there a differential charge for the deaf? As £3 is charged for altering an ordinary set to a transistorised set—a charge that must produce only a piffling amount in total—will the right hon. Gentleman seek to get the Post Office to change the arrangement?

Sir J. Eden: An aid specially tailored to meet the needs of a particular form of disablement can readily be identified. Then it is a matter for my right hon. Friend the Secretary of State for Social Services and the local authorities concerned to operate the powers they already have under the various relevant Acts. Where a device is of more general application, as in the case of amplified receivers, which would be available not only to those who are hard of hearing but to those in other circumstances, I think it is right that the Post Office should operate on a commercial basis and seek to cover its costs.

Mr. Pavitt: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the Minister's reply, I beg to give notice that I shall seek to raise the matter on the Adjournment.

Public Telephones

Mr. Sydney Chapman: asked the Minister of Posts and Telecommunications how many public telephone kiosks exist; what was the revenue derived from them in the last 12 months for which figures are available; and what is the current average cost of providing and fixing one ready for use.

Sir J. Eden: The Post Office Report and Accounts for 1971–72 show a total of about 76,000 telephone kiosks in the United Kingdom, which brought in income of £34·8 million. The average cost of providing one kiosk is £500.

Mr. Chapman: As the price we pay for vandalism of public telephone kiosks is now running at £500,000 a year, will my right hon. Friend seriously consider giving a direction to the Post Office to reduce the number of kiosks where appropriate and increase the number of facilities in places like all-night cafés and 24-hour petrol service stations, with appropriate signs outside, as they would seem likely to save the Exchequer a considerable amount of money?

Sir J. Eden: No, Sir. I do not think it is a matter on which I should give a general direction. I am aware that it is very much in the mind of the Post Office, which naturally takes great care in siting telephone kiosks and is continuing to do the maximum amount of research possible in the hope of finding new ways of preventing damage from vandalism.

Mr. Kaufman: May I strengthen the right hon. Gentleman in resisting the pleas of his hon. Friend? On new council estates being built in my constituency there are as yet, unfortunately, no shops, all-night cafés or other places where telephones might be installed, and the lack of a telephone for calling hospitals, ambulances and things like that would be greatly felt. The telephone manager has been very helpful in installing telephones on the new estates.

Sir J. Eden: That is just one of the factors that the Post Office must have in mind when determining where kiosks should be sited.

Miss Quennell: I have considerable sympathy with my hon. Friend the Member for Birmingham, Handsworth (Mr. Sydney Chapman), but if the number of kiosks in the Petersfield constituency were reduced great hardship would be caused.

Sir J. Eden: That is probably a widely held view.

Mr. Gregor Mackenzie: For some months hon. Members on both sides have been asking the right hon. Gentleman to put to the Post Office the necessity for putting telephones in multi-storey blocks, which we think would reduce vandalism and offer an excellent service to people who cannot get telephones in their own homes. No doubt the Post Office has heard our pleas. Will the Minister tell us whether it intends to do anything about it?

Sir J. Eden: No, Sir. I have said throughout the period that the hon. Gentleman has referred to that it is entirely a matter for negotiation between the Post Office and the landlords—in most cases the local authorities concerned.

Broadcasting Licence Revenue

Sir G. Nabarro: asked the Minister of Posts and Telecommunications what information he has received from the BBC concerning total broadcasting licence revenue during the year ended 31st March 1973; what was the BBC deficit for the year to that date; what is its anticipated deficit during the five years to 1978; and how he proposes to finance such a deficit.

Sir J. Eden: I must ask my hon. Friend to await the publication this autumn of the BBC's Accounts for 1972–73, which will show whether there was any deficit in that year. The BBC has made no representations to me about its revenue in 1972–73 and no forecast for the five years to 1978. No action is called for now.

Sir G. Nabarro: But these accounts are published long in arrear of the conclusion of every financial year. Meantime, the House is becoming increasingly apprehensive about the mounting losses of the BBC, which have already been put at a sum of £25 million or more, on account of broadcasting fees. Surely a

statement of my right hon. Friend's intentions should be made in the House before the end of July.

Sir J. Eden: I think that it would be much more helpful to my hon. Friend to have the full figures before him when they are published.

Mr. Mayhew: Will the right hon. Gentleman confirm that on at least six occasions in the past 10 years the corporation has had to ask the Government for an incerase in the licence fee? Is not that a thoroughly objectionable degree of dependence on the good will of Ministers? Is it not time the licence was replaced by a different form of financing, along lines put forward by several hon. Members on previous occasions?

Sir J. Eden: The Question refers to the existing arrangements for collecting the licence fee, not alternative ways of raising the money for the BBC.

Sir R. Cary: Is my right hon. Friend aware that licence revenue is the proper way to finance the BBC? It happens to be one of the cheapest licences in Europe. I should think it deplorable if the BBC were driven to borrowing large sums of money to keep its services going.

Sir J. Eden: The points my hon. Friend has made are certainly extremely relevant and need to be borne in mind when considering the cost to the licence-holder of financing the BBC's services.

Mr. John Grant: The Minister continues to evade the whole question of the financing of the BBC. He has done it today, and he did it in his speech during the broadcasting debate, when he referred to a comprehensive package of action from the Government in broadcasting and said nothing about financing. May we take it that he has this matter under active consideration? If so, when shall we have a statement from him?

Sir J. Eden: The hon. Gentleman does not make clear what he means by "this matter". The Question is whether the total broadcasting revenue during the year ending 31st March 1973 has been the subject of representations to me. I have said that it has not.

Sir G. Nabarro: On a point of order, Mr. Speaker. In view of those thoroughly unsatisfactory answers, I beg leave to give notice that I shall raise this matter on the Adjournment.

Regional Television (Newcastle-upon-Tyne)

Mr. Armstrong: asked the Minister of Posts and Telecommunications what plans he is considering for expanding BBC regional television in Newcastle-upon-Tyne; and if he will make a statement.

Sir J. Eden: This is a matter for the BBC and not for me.

Mr. Armstrong: Will the Minister tell the policy-makers at the BBC that Manchester is not in the Northern Region? Is he aware that the only old building in Newcastle that seems to be escaping demolition is the one that houses the BBC studios, and that there is an urgent need for purpose-built studios in Newcastle? It is intolerable that in 1973 I have to ask when Mike Neville and his colleagues will be available in colour to northern viewers.

Sir J. Eden: I can only advise the hon. Gentleman to approach the BBC direct on the matter, which is wholly within its responsibility.

Mr. English: We do not want the Minister to engage in politics with the BBC, but he must have some idea how it should socially cover the country. Does he recognise that the BBC promised that it would split the Midland Region, and has not yet done so?

Sir J. Eden: The question of coverage is a matter that can be brought under consideration by the special study under Sir Stewart Crawford, which I announced the other day.

Parcels

Miss Quennell: asked the Minister of Posts and Telecommunications if he will give a general direction to the Post Office to inform senders of parcels that, unless they pay a compensation fee at the time of dispatch, the corporation declines to accept liability for their loss.

Sir J. Eden: No, Sir. This is clearly within the direct responsibility of the

Post Office and a general direction would not be appropriate.

Miss Quennell: Is my right hon. Friend aware that as from last September the Post Office decided to cease to pay for packages or parcels lost in transit unless the poster had paid a compensation fee in addition to the normal postal charge, and that it did so without embarking on a widespread publicity campaign to inform postal users? If he will not issue a general directive, will my right hon. Friend at any rate exert his influence to ensure that Post Office users posting parcels see an advertisement making their liability clear, so that we do not have post offices, like the House of Commons post office, where there are no signs to inform the public?

Sir J. Eden: There is a great deal in what my hon. Friend says, and I am sure that the Post Office will wish to take careful note of it.

Mr. Heffer: Will the right hon. Gentleman impress upon the Post Office the importance of this matter? Is he aware that I was a victim of the new system? I sent the usual Christmas parcels to my friends in America. Those parcels were never received. I then wrote to the Post Office asking for some sort of compensation. I was told, "You should have paid the compensation fee." That was something about which I knew absolutely nothing. I am sure that if that applies to me and the House of Commons post office it must apply to many thousands, or hundreds, of people throughout the country. Will the right hon. Gentleman ensure that the point made by the hon. Member for Petersfield (Miss Quennell) is taken up?

Sir J. Eden: I said at the outset that this is a matter for the Post Office. I am sure that it will take careful note of what the hon. Member for Liverpool, Walton (Mr. Heffer) and my hon. Friend the Member for Petersfield (Miss Quennell) have said.

Television (Ireland)

Mr. McNamara: asked the Minister of Posts and Telecommunications if he will make a statement on his discussions with the Irish Minister of Posts and Telecommunications concerning the availability of programmes from the Republic


and from the North of Ireland being seen in Northern Ireland and the Republic, respectively.

Sir J. Eden: The proposals put to me by the Minister of Posts and Telecommunications of the Irish Republic require a great deal of study before any view on them can be taken.

Mr. McNamara: Is the right hon. Gentleman's initial reaction one of sympathy to the proposal? Does he agree that the proposal could do a great deal to decrease suspicion and hostility between different parts of Ireland, and could help to bring a more ecumenical understanding in both parts of Ireland?

Sir J. Eden: That is one of the points which need further study. The proposals were just put to me and I made it clear that I should be prepared to look at them more closely.

Mr. John Grant: Instead of saying that that is one of the points to be considered, will the right hon. Gentleman at least accept in principle the point made by my hon. Friend that this kind of interchange of information would be helpful?

Sir J. Eden: In advance of a closer study of the point put to me, I am not prepared to accept or reject anything.

Television and Sound Broadcasting (Legislation)

Mr. Whitehead: asked the Minister of Posts and Telecommunications what recent representations he has received concerning the exercise of his powers under the Television Act 1964 and the Sound Broadcasting Act 1972.

Sir J. Eden: None, Sir.

Mr. Whitehead: Bearing in mind the debates in Committee about what is now Section 6 of the Sound Broadcasting Act 1972, does the Minister accept that it may be regrettable that some of the companies which have extensive interests in commercial television have been allowed by the IBA to take an interest in radio companies in the same area? Does he agree that while we need the technical expertise of companies like Rediffusion and Granada it would be better if that expertise were deployed in other areas, if IBA is giving out these contracts, so

that there is not the danger of a conglomerate of monopolies?

Sir J. Eden: Section 6 of the Sound Broadcasting Act 1972 made it clear that the companies to which the hon. Gentleman referred would not be given a controlling interest and would not be allowed to run stations in the areas in which they operated. It did not proscribe them from having any shareholding.

Oral Answers to Questions — WALES

Bardsey Island (Administrative Status)

Mr. Goronwy Roberts: asked the Secretary of State for Wales if he will make a statement defining the administrative status of the Island of Bardsey, off the county of Gwynedd, as a result of the Local Government Act 1972.

The Secretary of State for Wales (Mr. Peter Thomas): The island is part of the county of Gwynedd but not part of the district of Dwyfor.

Mr. Roberts: Is the right hon. and learned Gentleman aware that the island is a national shrine and has been a place of pilgrimage for many centuries? Is he aware that there is widespread and growing concern about the apparent erosion, in recent years, of public rights of access to the island, and to movement upon it? Does he agree that it is high time—he was given the opportunity in the 1972 Act—he made a definitive statement which would make it clear that the island is not only administratively but effectively part of the mainland and part of the county of Gwynedd, subject to the same statutes and byelaws and with the same protection of public access, including rights of navigation across the sound?

Mr. Thomas: I am fully aware of the great historical importance of the island and of the affection in the minds of the people of North Wales for the island. The Local Government Boundaries Commission for Wales will be able to propose under Schedule 10 of the Local Government Act 1972, should it consider it appropriate, that Bardsey Island should be part of the district of Dwyfor.

Mr. Cledwyn Hughes: Will the right hon. and learned Gentleman give a fuller reply to my right hon. Friend? Is he aware that Welsh people have enjoyed access to this treasured and historic shrine


from time immemorial? Is he further aware that there is widespread concern far beyond Caernarvonshire that access is now to be denied? Will he do all in his power to safeguard public rights and to clarify generally the position, which is causing considerable apprehension in the area?

Mr. Thomas: By reason of correspondence which I have had with the right hon. Member for Caernarvon (Mr. Goronwy Roberts), I have gone into the question of access. I do not see how the issue of access rights is affected by the fact that the island is not in the district.

Oral Answers to Questions — TRADE AND INDUSTRY

Shipping and Shipbuilding (Investment Incentives)

Mr. Willey: asked the Secretary of State for Trade and Industry whether he will make a statement on his discussions with the Chamber of Shipping of the United Kingdom about a scheme of investment incentives of mutual benefit to the shipping and shipbuilding industries.

The Under-Secretary of State for Trade and Industry (Mr. Cranley Onslow): There have been no such discussions. The Government have not contemplated reintroducing a general scheme for investment grants for shipowners.

Mr. Willey: I am obliged to the hon. Gentleman for the clarity, at any rate, of what he said. As we now have the Booz-Allen Report and as there will be a lot of speculation about the future of shipbuilding and investment grants, or other ways of helping shipbuilding, will the hon. Gentleman ensure that discussions are held as early as possible, and that the Government will take a decision as early as possible? Does the hon. Gentleman accept that uncertainty causes a great deal of harm?

Mr. Onslow: I certainly accept that uncertainty can cause harm. The right hon. Gentleman may like to know that we are inviting representatives of the industry, the unions and other interested parties to send to the Department of Trade and Industry written observations on the report and its implications not later than 15th June. Of course, as

soon as we get those written observations we shall have any necessary discussions and will then proceed to form conclusions about policy.

Dame Irene Ward: This is an important matter both to shipbuilding and to shipping. I realise that some time must elapse for this very important report to be considered, but will my hon. Friend give an undertaking through the usual channels that he will ensure that there is a full-scale debate, in which those on both sides of the House who are interested in this important issue can give their views, as well as Booz-Allen, the shipbuilders and the shipping people?

Mr. Onslow: I do not know whether I can answer for the usual channels.

Dame Irene Ward: Oh, you can.

Mr. Onslow: I think that I can assure my hon. Friend that a futher statement will be made when consultations are completed. No doubt those who are interested in these matters will take all the steps that seem appropriate to press the need for further debate.

Mr. Mason: It is noticeable that the Booz-Allen Report which has been laid before the Government does not take us any further than the Geddes Report of 1966. That is probably because of the conservatism of employers and trade unions—management and men—in the shipbuilding industry. That makes it inevitable that the industry will have to be publicly owned. Is it right that the hon. Gentleman had no discussion with either the Chamber of Shipping or the federation on the implications of the Booz-Allen Report during the stage when it was being prepared?

Mr. Onslow: I know about the right hon. Gentleman's consuming passion to nationalise everything. However, I think he will agree that as the report has only recently been made available it is reasonable that we should have time to study it before we come to any conclusion.

Pyramid Selling

Mr. Raphael Tuck: asked the Secretary of State for Trade and Industry whether he has yet reached a decision on what action he will take with reference to outlawing the practice of pyramid selling.

The Minister for Trade and Consumer Affairs (Sir Geoffrey Howe): I am still exploring the possibility of including the necessary measures in the Fair Trading Bill.

Mr. Tuck: Is the right hon. and learned Gentleman aware that whilst all this delay is going on people are being conned daily out of large sums of money which they cannot afford while others wax fat on their misery? Why does not the right hon. and learned Gentleman take over my Bill, alter it as he pleases and get it passed swiftly by both Houses? Does he not do so because I am a Member of the Opposition? If I were to cross the Floor of the House, would that make it easier for him? As he knows, I am always most accommodating.

Sir G. Howe: I am sure that if the hon. Gentleman were to cross the Floor mixed emotions would be excited on both sides of the House. The hon. Gentleman knows, because we have discussed it several times in debate, that for a number of reasons his Bill and its basic definition cannot be expanded so as to cover all aspects of the abuse that he wants to tackle.
The House knows that some weeks ago we published a consultative document about pyramid selling. We have received a great deal of useful information and comment. We are anxious that ways should be found of regulating pyramid selling as soon as possible, in the light of the information and comments that we have received. I echo the warning to the public that they should not be led into joining schemes of the kind in question. Nobody should enter that kind of marketing scheme except after the most careful thought and after receiving independent advice.

Mr. Alan Williams: I appreciate the difficulties, in that the consultations have only recently culminated and that the Fair Trading Bill is not about to go to another place, but when will the right hon. and learned Gentleman be able to announce his proposals to the House? Will he be putting them forward as amendments to the Bill in another place? In view of the initiative that many hon. Members on both sides have shown on the issue, will he concurrently make a statement in the House?

Sir G. Howe: I hope to be able to come to a conclusion as soon as possible, and I will consider the hon. Gentleman's suggestion about ways of making it known.

South African Products

Mr. Leslie Huckfield: asked the Secretary of State for Trade and Industry whether he will make it his policy to prohibit the import into the United Kingdom of South African produce and products using convict or prison camp labour.

Sir G. Howe: The Government would use their powers under the Importation of Foreign Prison-made Goods Act 1897 and the Customs and Excise Act 1952 in appropriate cases.

Mr. Huckfield: Is the right hon. and learned Gentleman satisfied that products particularly emanating from Western Cape and South West Africa, including furs and wines, do not come into this category? If they do, is that not against the GATT? Will he conduct a thorough examination into the question whether such products are coming into this country? If they are, will he use his powers accordingly?

Sir G. Howe: I have read certain writings about these matters. The Government are prepared to say that any suggestions of this kind will be closely examined. If the hon. Gentleman has any evidence in relation to particular imports, or can direct our attention to such evidence, I am sure that my right hon. Friend the Chancellor of the Exchequer will arrange for the matter to be investigated.

North Irish Sea (Oil and Gas Potential)

Mr. Taney: asked the Secretary of State for Trade and Industry what action he is taking to interest and encourage oil drilling companies to explore the potentialities for oil and gas in the North Irish Sea.

Mr. Onslow: Eight companies already hold licences, covering about 1,800 square miles, in the North Irish Sea. They were committed to drill eight exploration wells and to carry out seismic surveys under work programmes laid down when the licences were granted.

Mr. Tilney: Is my hon. Friend aware that in a minor way oil has been pumped for many years from Formby, and that the discovery of oil or gas in the North Irish Sea would be a tremendous boost to industry in Lancashire, on Merseyside and in North Wales? Will he galvanise into action the companies that have been granted these licences?

Mr. Onslow: Under the terms of their licences, these companies must complete their drilling programmes within six years of the grant. On that basis, five wells will have to be drilled in the next three years and a further two in the next five years. So far, two wells have been drilled, but both were dry.

Mr. Eadie: The appointment of Lord Polwarth was announced outside this House. We understand that he has been designated as a trouble-shooter in relation to the North Sea oil exploration activities. Will the hon. Gentleman tell the House of Commons how it is to be informed when Lord Polwarth finds trouble? May we be informed exactly whom he will shoot once he finds trouble?

Mr. Onslow: If the hon. Gentleman takes the trouble to turn up next Friday morning he can make his speech about it then.

Shipping (Non-Tariff Barriers)

Mr. Wingfield Digby: asked the Secretary of State for Trade and Industry what information he has as to the working of non-tariff barriers to trade such as fiscal incentives given to United States shippers using domestic international sales corporations and as to the extent to which this is resulting in loss of foreign exchange to British shipping.

Mr. Onslow: The fiscal incentives of the American DISC system could reduce British shipping earnings by encouraging preferential use of American ships. It is difficult to quantify their effect, nor is it easy to assess the effect on British shipping of other discriminatory practices applying elsewhere in the world. We keep in close touch with the industry about this situation.

Mr. Wingfield Digby: Are not these so-called "DISCS" a serious threat not only to our seaborne but to our airborne

freight? Is it not a bad example to other, less affluent exporting nations? Will the Government consider retaliatory measures?

Mr. Onslow: It is too much to ask that the Government should commit themselves to retaliatory measures, but I assure my hon. Friend that we have on several occasions made representations to the United States Government about the effect of their measures.

Mr. Mason: I am obliged for that reply. This type of non-tariff barrier DISC is not only affecting the foreign earnings of our shipping but is frustrating the efforts of exporters who want to get into the United States market, especially in major products. I hope that the Government will keep up their pressure on the United States.

Mr. Onslow: It does not militate simply against British shipping interests. The EEC Commission raised the question at discussions in the GATT last year and there will be an opportunity to raise the matter again in the GATT Council at the end of this month.

Dame Irene Ward: This is not simply a question of providing us with knowledge. My hon. Friend's answer does not say what action will be taken. I am rather keen on action. I have heard this argument for a long time and I should like to see a little more action.

Mr. Onslow: I know my hon. Friend's desire for action, but my hon. Friend the Member for Dorset, West (Mr. Wingfield Digby) asked only for information.

Dame Irene Ward: I am asking for action.

Multiplex Designs Limited (Liquidation)

Dame Patricia Hornsby-Smith: asked the Secretary of State for Trade and Industry if he will hold an inquiry into the chain of circumstances leading to the appointment of a receiver and the subsequent liquidation of Multiplex Designs Limited, following an industrial dispute and complaint to the industrial wages board, which was later dismissed, and into the speed of the sale of this company and into the sum for which it was sold.

Sir G. Howe: Complaints about the appointment or conduct of the receiver or about the liquidation fall to be resolved in the liquidation. I have received no evidence that would justify any other form of inquiry into these matters.

Dame Patricia Hornsby-Smith: Is my right hon. and learned Friend aware that that is quite the most unsatisfactory answer I have ever had from him? Is he further aware that in the course of an industrial dispute, subsequently decided in favour of the company, his right hon. Friend, in answer to a supplementary question, by a slip of the tongue used the word "orders" when he meant "contracts"? Is my right hon. and learned Friend aware that that one word put Multiplex out of business?
My right hon. Friend most honourably wrote correcting his slip some days later, but immediately following that HANSARD reply staff of the Service Departments and Barclays Bank read it, all orders were stopped, and Barclays slammed in a receiver, who has since sold a company worth £105,000 for £20,000. This is an intolerable injustice to my constituents who, having been found to be acting honourably in regard to industrial wage affairs, and found solvent, have now lost their entire life's work and company? Will my right hon. and learned Friend, under the Companies Act, examine this matter and see whether something can be done?

Sir G. Howe: I am sorry that my right hon. Friend should direct so much of her anxiety at me. I know, from the correspondence we have had and from what I have read in a number of other places, of the extent to which she has striven to bring the difficulties of those connected with the company to the attention of the Departments concerned.
The difficulties originated, I think, with the application under the Fair Wages Resolution which was subsequently determined by the Industrial Arbitration Board. As far as my responsibility is concerned, the position is that the debenture holders exercised their right to appoint a receiver after several meetings with the company to discuss it, and my function does not permit me to intervene in relation to the activities of the receiver.
If the activities of the receiver are to be questioned, they may be questioned

by the liquidator, who has also now been appointed. It is in that context that I said that any complaints fall to be resolved in the liquidation.
I appreciate the extent to which my right hon. Friend has raised this matter in a number of ways, but the position remains as I have stated. I have seen no evidence in relation to the conduct of the receivership and of the liquidation that could justify any form of inquiry into these matters that I could establish.

Dame Patricia Hornsby-Smith: Has not my right hon. and learned Friend a responsibility under the Companies Acts and, through that, a receiver responsibility, not only to pay creditors but to husband the assets and see that a proper return is provided for those who, having paid all their dues to creditors, are entitled to their savings and investments in their company? Can he not investigate the ridiculously low sum which has been provided for this company without the issue going to tender?

Sir G. Howe: As I have indicated, I have certain responsibilities under the Companies Acts. I have looked at those and at their scope, in the light of all the facts that my right hon. Friend has drawn to my attention and in the light of the point that she has just mentioned. Having done so, however, I find that there is no evidence that would justify any form of inquiry in respect of which I have a responsibility.
This is something which can be raised—and, no doubt, is being raised—by the liquidator on behalf of the other creditors and people interested in the company. That is the way in which the matter remains to be resolved in the context of the liquidation.
I have studied my right hon. Friend's correspondence and the background of this case as closely as her anxiety would justify.

North Sea Oil and Gas

Mr. Eadie: asked the Secretary of State for Trade and Industry how many persons are employed in his Department to advise him in matters of safety concerning exploration of North Sea oil and gas.

Sir G. Howe: Nine technical staff and six administrative staff are available to


advise on safety questions as part of their wider duties. The technical staff is being expanded.

Mr. Eadie: What part has the Department to play in the co-ordination of safety matters, particularly in relation to oil rigs? Are inspections being made regularly, and is he satisfied that the inspectorate has the staff to deal with this new but important problem?

Sir G. Howe: I agree with the hon. Gentleman about the importance of the problem. Inspectors make regular visits to offshore installations to ensure that the conditions are complied with, and as offshore activities develop so the staff will be expanded.

Mr. Marten: Is my right hon. and learned Friend's Department geared to cope with pollution caused by North Sea oil exploration?

Sir G. Howe: That is more a matter for the Department of my right lion. Friend the Secretary of State for the Environment, but I take note of the point raised by my hon. Friend.

Motor Car Industry (Lanarkshire)

Mr. James Hamilton: asked the Secretary of State for Trade and Industry what efforts are being made to encourage the motor car industry in Lanarkshire.

Mr. Onslow: The motor industry, in planning development, is able to take into account the facilities and Government financial assistance available in the assisted areas, which include Lanarkshire.

Mr. Hamilton: I think the hon. Gentleman for that reply. Does he appreciate that in Lanarkshire 7·2 per cent. of the insurable population are unemployed? Will he try to sell to those concerned the fact that already in Lanarkshire we have Honeywell, General Motors and the Caterpillar Company, and they have authorised me to say that the workers in Lanarkshire are second to none? Will he try to reduce the figure of 7·2 per cent. unemployed and to bring something worth while to the county?

Mr. Onslow: It is basically a matter for the motor industry to formulate its own proposals in the first instance, but I am sure that it will take note of what the hon. Gentleman has said.

Smokeless Fuel

Mr. Kelley: asked the Secretary of State for Trade and Industry what was the quantity of solid smokeless fuel imported into the United Kingdom, from EEC countries, since 1st January 1973.

Sir G. Howe: Smokeless fuels are not separately distinguished in the trade statistics, but imports of anthracite, briquettes of coal and of hard coke totalled 108·3 thousand metric tonnes.

Mr. Kelley: Is the Minister aware that smokeless fuels are coming into the country from West Germany and being invoiced to people in London while at the same time the National Coal Board is considering closing down two recently established smokeless fuel plants, installed at a cost of £10 million of public money? Is he aware that we are allowing this capital to be eroded in this way without any protection, and that this competition is coming from plants which have probably been established in Germany and other parts of Europe for 20 or more years?

Sir G. Howe: As I understand the situation, imported fuels are currently only about 5 per cent. of the smokeless fuel market and it would be inappropriate to ban those imports while we support home production at a financial loss. But any question of closure would arise only after careful examination of the financial prospects of the plants in question.

Mr. Edwin Wainwright: Will the Minister say whether we are still exporting anthracite dust to the Continent and re-importing it as smokeless fuel?

Sir G. Howe: I should like notice of that question, but I shall draw it to the attention of my right hon. Friend.

Oral Answers to Questions — CIVIL SERVICE

Pay

Sir G. Nabarro: asked the Minister for the Civil Service what pay increases he has recommended to the Pay Board for civil servants within the jurisdiction of his Department in phase 2; what will be the cost; how many persons are involved; and whether he will make a statement.

The Parliamentary Secretary to the Civil Service Department (Mr. Kenneth Baker): Pay increases ranging from £2·15 to nearly £4 per week for those who are 21 or older have been approved by the Pay Board for most non-industrial civil servants. These increases will be paid from 1st April. They cover nearly 490,000 staff and are estimated to cost about £63 million in a full year.

Sir G. Nabarro: Are the civil servants satisfied with this settlement or is it to be only an interim settlement pending renewal of all the claims or a major part of them under phase 3? Will my hon. Friend assure the House beyond peradventure that there will not be any further threats of strikes and the withholding of payment of pensions and other similar facilities from the elderly?

Mr. Baker: With regard to my hon. Friend's latter point, I think that the union concerned is now having second thoughts about having a strike to prevent the payment of pensions. I am sure that it is wise to have those second thoughts.
Regarding the question of anomalies, the Pay Board will report in September, or possibly before then, on the general question of anomalies. The anomalies related to the Civil Service are among those to be considered. The Government will then consider how the principle suggested by the Pay Board can be applied to civil servants.

Mr. Kaufman: Is the hon. Gentleman aware that the gravest anomaly of all is the fact that the failure of civil servants to get their reward on the comparability basis has permanently deprived them of part of their pension and that this has aroused great bitterness among them? Is he further aware that this matter requires not merely the Pay Board but the Government to assure civil servants that they will get the full pension that they would have earned had it not been for phase 1?

Mr. Baker: The hon. Gentleman has raised an important point. He will recognise that it raises a difficult problem, which the previous administration also faced and for which they were unable to find a solution. Discussions on this point are continuing with the National Staff Side, and perhaps a way through will be found.

Mr. Biffen: Is it fair to deduce from my hon. Friend's answer that the maximum increase for an accountant employed in the Civil Service is about £200 a year? Does he consider that an increase of that magnitude will anything like keep up with the increase in the going rate for accountants in the private sector?

Mr. Baker: My hon. Friend touches upon the fact that in this settlement there has been a deliberate attempt to move wage increases down the scale to some extent. The National Staff Side as a whole decided on a plan to give the lower-paid bigger increases, and we were glad to accede to this because it accords with Government policy.

Mr. Heffer: Is not the point made by the hon. Member for Oswestry (Mr. Biffen) absolutely valid? If these people were not inside the Civil Service but were self-employed, they could negotiate exactly what they wanted. Is not this totally unfair? Is it not time that the Government recognised the unfairness of their policy, particularly as the self-employed can get precisely what they like without any Government control?

Mr. Baker: I do not accept that it is unfair to direct what assistance may be given in the pay settlement this year to the lower-paid in the Civil Service. As I said in an earlier reply, the Government have referred to the Pay Board the question of the anomalies of the higher-paid civil servants.

Civil Servants

Mr. Michael McNair-Wilson: asked the Minister for the Civil Service what is the present number of persons employed in the Civil Service; and what is the percentage change compared with the position in June 1970.

Mr. Kenneth Baker: On 1st July 1970 the number was 701,790. By 1st April 1973 this had fallen to 700,152. I will, with permission, circulate the usual analysis in the OFFICIAL REPORT.

Mr. McNair-Wilson: Is my hon. Friend aware how much pleasure his answer has given to the Government side of the House, as it was one of our promises that we would reduce the size of the Civil Service? Will he remind the House how much the Civil Service


grew during the period of the previous administration?

Mr. Baker: I thank my hon. Friend for his congratulations. As I have said, in our first two and three quarter years the size of the Civil Service has remained roughly the same. In the same period under the Labour Government it rose by 3 per cent.

Mr. Sheldon: Before the hon. Gentleman starts congratulating himself too loudly, will he bear in mind that the number of non-industrial civil servants, the figures for whom were always used

Civil Service Staff in Post


1st April 1973


Ministerial Responsibilities

Central Administration
Public Services
Executive Functions Trading and Repayment Services
General Support Services


Cabinet Office







Secretariat and central support staff
…
430
—
—
—


Central Statistical Office
…
183
—
—
—




613
—
—
—


Agriculture, Fisheries and Food







Agriculture, Fisheries and Food policy
…
1,668
—
—
—


Agricultural Development and Advisory Service
…
—
5,009
—
—


Other technical staff
…
—
119
—
—


Regional and divisional offices
…
—
4,892
—
—


Kew Gardens and Wakehurst Place
…
—
467
—
—


Fisheries, Pest Infestation, Food Science and Torry Research laboratories
…
—
1,016
—
—


Central Services
…
1,842
388
—
—


Intervention Board for Agricultural Produce
…
120
180
—
—




3,630
12,071
—
—


Chancellor of the Exchequer







Treasury
…
1,008
—
—
42


Customs and Excise:
…






Collection of indirect taxes and control of imports and exports
…
1,830
20,668
—
—


Import and export statistics
…
966
—
—


Inland Revenue:







Collection of direct taxes, etc.
…
2,524
60,183
89
1,837


Land and property valuation services
…
6,080
—
—


Department for National Savings:
…






Receipt and repayment of savings
…
269
—
12,991
—


Support of voluntary savings movement
…
496
—
—


Small Departments:







Exchequer Office, Scotland
…
15
10
31
10


Government Actuary
…
—
—
—
58


National Debt Office
…
13
24
21
—


Paymaster General's Office
…
64
—
—
576


Registry of Friendly Societies
…
16
66
14
—


Royal Mint
…
—
—
1,305
—


Treasury Solicitor
…
75
35
—
277




5,814
88,528
14,451
2,800

until the hon. Gentleman started muddying the waters, has increased regularly and dramatically over the past two and a half years?

Mr. Baker: I am not conscious of muddying any waters. My comparisons have been absolutely accurate. If the hon. Gentleman wants to talk only about non-industrial civil servants he should remember that under the Labour Government's first three years their number increased by 41,000, whereas under the Conservative Government's first three years they increased by 15,000.

Following is the information:




Ministerial Responsibilities

Central Administration
Public Services
Executive Functions Trading and Repayment Services
General Support Services


EDUCATION AND SCIENCE







Education and scientific policy and administration, including University Grants Committees and HM Inspectorate of Schools
…
2,148
814
—
—


National Lending Library
…
—
—
324
—


Victoria and Albert Museum
…
—
640
—
—


Science Museum
…
—
419
—
—




2,148
1,873
324
—


Employment







Employment and training services
…
1,681
18,369
77
—


Occupational safety and health
…
1,595
—
—


Industrial relations
…
767
—
—


Industrial Tribunals and Industrial Arbitration Board
…
282
—
—


Selective employment payments
…
392
—
—


Unemployment benefits and redundancy payments
…
11,230
—
—


Passport work
…
—
520
—


Office of Manpower Economics
…
19
—
—
—




1,700
32,635
597
—


Environment







Property Services Agency
…
2,161
1,303
7,129
36,285


Local Government and Environmental Services
…
2,824
6,744
5,429
—


Housing
…
152
520
—
—


Driver and Vehicle Licensing and Local Taxation Offices
…
—
—
2,926
—


Transport Industries
…
780
220
—
—


Research
…
—
2,855
—
—


Related Bodies
…
—
697
—
—


Ordnance Survey
…
218
3,919
519
—




6,135
16,258
16,003
36,285


FOREIGN AND COMMONWEALTH







Diplomatic Service (Home)
…
3,430
951
56
58


Diplomatic Service (Overseas)
…
12
2,905
304
—


Government Communications Headquarters
…
233
1,642
—
—


Passport Office
…
—
—
733
—


Overseas Development Administration:


Aid Administration
…
950
—
—
—


Overseas manpower division
…
—
407
—
—


Overseas technical assistance
…
—
919
—
—




4,625
6,824
1,093
58


HOME







Prisons (England and Wales)
…
500
19,455
—
—


Immigration
…
1,100
1,365
—
—


Police Services
…
290
3,080
—
—


Fire
…
90
355
—
—


Criminal
…
145
—
—
—


Probation and after-care
…
190
75
—
—


Community programmes and general
…
125
—
—
—


Scientific, research and statistics
…
260
—
—
—


Central services
…
815
—
—
—


Finance and Accounts
…
265
10
—
—


Carlisle State Management Scheme
…
—
—
692
—




3,780
24,340
692
—







Ministerial Responsibilities

Central Administration
Public Services
Executive Functions Trading and Repayment Services
General Support Services


LORD CHANCELLOR







Lord Chancellor's Department
…
247
—
—
—


Courts Service
…
—
8,503
—
—


Family Division
…
—
514
—
—


Land Registry
…
—
—
4,804
—


Public Trustee
…
—
—
532
—


Public Record Office
…
—
329
—
—




247
9,351
5,336
—


LORD PRIVY SEAL







Civil Service Department:
…






Management of the Civil Service
…
660
—
—
191


Civil Service Recruitment
…
—
—
—
432


Civil Service College
…
—
—
—
346


Central Services
…
634
—
—
—


Chessington Computer Centre
…
—
—
—
327


Central Computer Agency
…
100
—
17
405


Civil Service Catering Organisation
…
—
—
1,651
—


Central Office of Information
…
106
—
—
1,183


HM Stationery Office:







Procurement and distribution of paper, printing, etc
…
413
—
1,546
1,463


Production units: printing, binding and reprographic
…
—
1,432
2,475




1,913
—
4,646
6,822


NORTHERN IRELAND







Northern Ireland Office
…
118
—
—
—


POSTS AND TELECOMMUNICATIONS







Broadcasting and radio regulatory
…
192
40
100
28


Posts and Telecommunications
…
91
—
—
—




283
40
100
28


SCOTLAND







Scottish Office:







Department of Agriculture, Fisheries and Food
…
422
1,969
—
—


Scottish Development Department
…
776
116
66
—


Scottish Education Department
…
312
309
—
—


Scottish Home and Health Department
…
505
473
38
—


Central Services
…
2,145
—
—
—


Prisons
…
—
2,165
—
—


State Hospitals
…
—
302
—
—


Scottish Courts Administration
…
32
629
—
—


Small Scottish Departments:


General Register Office, Scotland
…
35
390
—
—


Lord Lyon and Warden of Regalia
…
—
—
5
—


Registers of Scotland
…
—
—
346
—


Royal Scottish Museum
…
—
164
—
—


Scottish Record Office
…
—
135
—
—




4,227
6,652
455
—


SOCIAL SERVICES







Health Services:







Special Hospitals
…
4,096
1,664
—
—


Artificial Limb and Appliance Centres
…
898
—
—


National Health Service Superannuation
…
383
—
—


War Pensions Hospital
…





Artificial Eye Unit
…
95
—
—


Common Cold Research Unit
…





Youth Treatment Centre
…





Blackpool Central Office
…
462
—
—







Ministerial Responsibilities

Central Administration
Public Services
Executive Functions Trading and Repayment Services
General Support Services


SOCIAL SERVICES—cont.







Social Security benefit services:







Regional Organisations
…
2,670
55,435
—
—


Newcastle Central Office
…
10,408
—
—


Blackpool Central Office
…
2,386
—
—


ADP Centre, Reading
…
190
—
—


Office of Population Censuses and Surveys
…
544
1,405
—
633




7,310
73,326
—
633


TRADE AND INDUSTRY







International trade
…
248
1,361
—
—


Industry and commerce
…
1,580
1,961
3,706
—


Industrial research
…
—
3,670
—
—


Civil aviation and marine
…
429
882
427
—


Central services (including Business Statistics Office)
…
3,450
—
—
997


Export Credits Guarantee Department
…
—
—
1,672
—




5,707
7,874
5,805
997


WALES







Welsh Office:







Primary and secondary education including HM Inspectors of Schools
…
26
50
—
—


Local government and development including housing
…
375
—
—
—


Health services
…
161
—
—
—


Artificial Limb and Appliance Centre
…
—
46
—
—


Central services
…
340
—
—
—




902
96
—
—


SMALL DEPARTMENTS







Charity Commission
…
43
276
—
—


Civil Service Pay Research Unit
…
—
—
—
37


Crown Estate Office
…
—
—
126
—


Crown Office
…
23
—
—
—


Director of Public Prosecutions
…
10
142
—
—


Law Officers' Department
…
20
—
—
—


Lord Advocate's Department
…
14
—
—
—


Parliamentary Counsel
…
—
—
—
48


Privy Council Office
…
34
—
—
—


Procurator Fiscal Service
…
—
302
—
—


Registrar of Restrictive Trading Agreement
…
—
61
—
—


Registry of Trade Unions and Employers' Associations
…
23
21
—
—


Supreme Court of Northern Ireland
…
—
94
—
—




167
896
126
85


TOTAL
…
49,319
280,764
49,628
47,708


GRAND TOTAL
…
427,419




Ministerial Responsibility
Staff


DEFENCE




Ministry of Defence Headquarters:




(a) Main Headquarters
…
10,149


(b) Defence Procurement Executive Headquarters
…
6,637


Maintenance, repair, storage and supply organisations
…
105,102


Command and support services for armed forces including medical, education and training establishments
…
77,221


Defence Procurement organisation outside Headquarters, including Research and Development establishments and Royal Ordnance factories
…
70,249


Meteorological Office
…
3,375




272,733

Leader of the Opposition

Mr. Bruce-Gardyne: asked the Minister for the Civil Service what consideration he has given, in the course of his review of the central machinery of Government, to the establishment of a Department for the Leader of the Opposition.

Mr. Kenneth Baker: We have no plans to establish such a Department.

Mr. Bruce-Gardyne: I am grateful to my hon. Friend for that reply, notwithstanding the fact that the present incumbent clearly needs assistance from any quarter for which he can get it. But, on a broader philosophical point, does not my hon. Friend agree that any incoming Government need all the determination they can muster to move the civil servants one iota from their entrenched positions, and that if the civil servants were enabled to get in on that determination before an incoming party came to power there would be small hope of moving them at all?

Mr. Baker: There is something in the latter part of my hon. Friend's question. Regarding the first part, I agree with him. I do not know quite what such a Department would do. I suppose that it could provide the Leader of the Opposition with a degree of loyal support—and that would certainly be a novelty on the Opposition benches.

Mr. James Hamilton: Does the hon. Gentleman concede that Questions of this nature are an abuse of parliamentary time? Does he also recognise that if the hon. Member for South Angus (Mr. Bruce Gardyne) wants to tangle with the Leader of the Opposition, he should do so in a parliamentary fashion.

Mr. Baker: By no means. There has been a considerable degree of interest in this matter. The right hon. Member for Bristol, South-East (Mr. Benn) wrote an article advocating the establishment of such a Department. I dare say that that is good reason for believeing that the chances of its being adopted by the Opposition as official policy are about 10 to 1 against.

Mr. Adley: If this suggestion is taken seriously, will my hon. Friend consider having discussions with my right hon.

Friend the Leader of the House to see whether we can have a Leader of the Opposition's Question Time, as many of us would like to question him about such things as former consultancies?

Mr. Baker: I think that the Leader of the Opposition can look after himself at Question Time.

Mr. Sheldon: Is not the hon. Gentleman aware that the events of the past two and a half years have shown that the country pays a very high price for the education of its Government and that the U-turns undertaken by the Government are direct consequences of their isolation from the Civil Service? If that is so, is it not possible to have some sort of arrangement whereby the Opposition can maintain a rather better contact with the Civil Service, so that, without injuring their reforming zeal, they will at the same time be able to produce policies more relevant to the situation than the present Government have so far been able to produce?

Mr. Baker: No, I do not agree with that. The hon. Gentleman raises a fundamental question, namely, the financing of the Opposition and Opposition activities—and, possibly, research activities. That raises the fundamental issue of using public funds for political purposes. It is completely new to our constitution. It needs a great deal of thought on both sides of the House, and a great deal of public discussion.

Oral Answers to Questions — HOUSE OF COMMONS

Private Members' Bills

Mr. Thomas Cox: asked the Lord President of the Council if he will move to amend the existing procedures of the House of Commons so that any Member seeking to object to a Private Member's Bill will be required to rise in his place, when objecting, and that his name be recorded in the OFFICIAL REPORT.

The Lord President of the Council and Leader of the House of Commons (Mr. James Prior): Such matters are already within the terms of reference of the Procedure Committee.

Mr. Cox: Is the right hon. Gentleman aware of the urgency of this matter?


The whole concept of the Private Member's Bill is being abused. Week after week Bills are being deliberately objected to in this House even when they have wide support on both sides of the Chamber. I refer to legislation such as the Export of Animals (Control) Bill and the Improvement Grants (Restrictions on Eligibility) Bill.
We must seriously start to question the motives behind some of these objections. Is it not time for those hon. Members concerned to have the courage to stand up, to be seen, and, when they object, to have their names recorded in the OFFICIAL REPORT?

Mr. Prior: There are other points to be considered as well as that one. If the hon. Gentleman will read the Report of the Procedure Committee, which examined this matter last in 1963–64, he will see some of the problems which the course he recommends would create for the House. There is also the point that many hon. Members object not just because they do not like the Bill but because they do not think that a Bill should automatically receive a Second Reading without debate.

Mr. Sydney Chapman: Does my right hon. Friend realise that there is bitterness on both sides of the House about this matter? Should not those who are responsible for organising our timetable face the honest possibility of having fewer Private Members' Bills discussed but of ensuring that those which are discussed are given a chance to get on the statute book?

Mr. Prior: This is a particularly difficult matter. I remind the House that last year I got into trouble about what I did over the progress of one Bill through the House, because certain hon. Members did not like it.

Mr. Stallard: Does the Leader of the House agree that his reply adds nothing to the situation? It seems to suggest that those who object do so to prevent a Bill's receiving a Second Reading, but that is not the point. The point is that certain hon. Members object mainly because there is a vested interest in preventing discussion of some Bills. The right hon. Gentleman's reply does not mean anything. There is nothing, to stop an hon. Member's being named, if he so

wishes it, or has the courage to stand up and be named.

Mr. Prior: I recognise that this is not an easy problem. If the hon. Gentleman reads the report of the Select Committee on the Procedure in the Session 1963–64 he will realise that there are considerable difficulties in the course which he recommends. But there is nothing to stop the Select Committee on Procedure reconsidering this matter if the House thinks that it is desirable to do so.

Sir G. Nabarro: Will my right hon. Friend bear in mind that there is widespread opinion in this House which is entirely adverse to his point of view, and that many of us take the gravest exception to the intervention of the Whips in what is essentially a Private Member's gesture in promoting a Bill? If we could be assured that the procedure could be reformed so that people objecting would have to show their hands and be seen to be the servants of the Whips, we could take very much more kindly to the objections that are being voiced. Will my right hon. Friend study the matter from that point of view? I remind him that the last time the matter was examined was 10 years ago.

Mr. Prior: It is not for me to study the matter; it is a matter for the Select Committee. If the Select Committee would like to reconsider this matter we could obviously make arrangements for it to do so. But in fairness to Government Whips I must point out that, certainly in this Session, to my knowledge, there have been many occasions on which they have not objected but other hon. Members have.

POPULATION POLICY

Mr. Jessel: asked the Lord President of the Council if he will make a statement on progress by the Government towards a population policy.

Mr. Prior: When the report of the Population Panel was published I said that the Government would allow public opinion to crystallise before announcing its conclusions on the panel's recommendations. I do not think that there has been sufficient time for public discussion, so it would be premature to make a statement now. I propose to make a


statement after Parliament reassembles in the autumn.

Mr. Jessel: Does my right hon. Friend agree that public opinion is tending towards crystallising in the direction of what is said in the report of the population Panel? Does he further agree that many of the problems with which we have to deal, such as the housing shortage, high food prices and traffic congestion, are made worse by the rate of population growth? Does he also agree that the size of the population is a matter of rightful concern for the Government of the day?

Mr. Prior: So far, the letters that I have received have been generally in favour of the Population Panel's recommendations. I am aware that there are other points of view, and it may be that we shall receive further representations from those who hold them, but, as for the general remarks of my hon. Friend, I should tell him that anything we could do at this moment to control the population or to have a population policy would have little immediate effect on the housing or food situation.

Mr. Wall: Will my right hon. Friend bear in mind that grave moral and religious matters are involved in this question?

Mr. Prior: Yes, Sir; that is one of the points I was trying to make. But for all that I must tell my hon. Friend that so far the overwhelming consensus has been in favour of the report.

NATIONAL FINANCE

Public Sector Borrowing

Mr. Bruce-Gardyne: asked the Chancellor of the Exchequer what progress he has made in financing the public sector borrowing requirement in the current financial year; and if he will make a statement.

The Minister of State, Treasury (Mr. John Nott): Good progress, Sir.

Mr. Bruce-Gardyne: I am delighted to have that most informative reply from my hon. Friend. Can he state the extent to which, apart from the useful further information that we shall obtain from my right hon. Friend the Chancellor of the Exchequer in a few moments, the progress

of the Government's efforts to finance the borrowing requirement has been assisted by borrowing by the nationalised industries—the Electricity Council especially?

Mr. Nott: Borrowing overseas will not have any effect on the size of the borrowing requirement. Transactions through the Exchange Equalisation Account in sterling are still required within the domestic economy, even when money is borrowed abroad in foreign currency.

Mr. Paget: Does the hon. Gentleman agree that the use of foreign funds for investment in this country is highly beneficial to the country and should be encouraged?

Mr. Nott: I did not quite catch what the hon. and learned Gentleman said, but if he was suggesting that investment by overseas companies in this country was advantageous the answer is "Yes".

PUBLIC EXPENDITURE

The Chancellor of the Exchequer (Mr. Anthony Barber): With your permission, Mr. Speaker, and that of the House, I wish to make a statement.
A primary objective of this Government has always been to set our nation on a course of faster economic growth. In the 1972 Budget our aim was a rate of 5 per cent. That we achieved.
Having lifted the economy on to this path of higher growth, the aim of this year's Budget was to continue on that path over the next year or so. All the indicators confirm that the economy is continuing to expand at an annual rate of at least 5 per cent., as we intended. Production, industrial productivity and retail sales have all been rising well. Industrial investment is now beginning to forge ahead, and exports are growing strongly—indeed, more strongly than I expected. Unemployment has continued to fall. These are the welcome signs of success.
Despite some of the problems associated with that success—pressure on the construction industry in some areas and a shortage of skilled labour in certain sectors of industry—we will still have for some time ahead the spare resources necessary to continue that faster rate of growth which is a primary objective of


our economic strategy. Furthermore, the nation is firmly behind the Government's counter-inflation policy, which is a key part of the strategy for expansion.
But if we are to secure a lasting improvement in our economic performance, and so in our prosperity, we must at this stage look beyond the present financial year and take whatever action is necessary now to secure the opportunity for steady and sustained economic growth during the next financial year, 1974–75, and beyond.
This sustained growth will depend crucially on the continued strong expansion of industrial investment and exports which we can now expect. It is therefore essential that we now seize this opportunity to get industrial investment and exports on to a higher level and a faster growth path. At the same time, we must allow for a reasonable rate of increase in personal consumption. Looking ahead beyond this financial year, in order to make sure that we have sufficient resources for these three vital elements of demand—industrial investment, exports and personal consumption—it is necessary to moderate the growth of the remaining principal element of demand—public expenditure.
This was deliberately expanded at the end of 1971 as a temporary measure to reduce unemployment. Now, with unemployment falling at a good rate, and—what we have always wanted—with exports and industrial investment rising fast, is the time to look beyond this financial year. To permit the changes in the pattern of output required to meet these expanding demands, we must take decisions now to ensure that public expenditure, while continuing to grow to meet essential needs, does not pre-empt too much of the nation's output and so jeopardise the continued expansion of the economy in 1974–75 and beyond.
In my Budget Statement I announced that certain work on public expenditure had been put in hand last year. That work is now complete and my colleagues and I have decided on certain changes in public expenditure next year, 1974–75.
We have throughout adopted a selective approach, and the result is that a net saving will be achieved without any reduc-

tion in the building programmes for hospitals; for schools, including nursery schools and the replacement of the older schools; without any reduction in the building programmes for colleges and universities; for old people's homes, and other buildings for the local health and personal social services; and without any change in the rates of regional development grants.

Mr. Frank Allaun: Housing?

Mr. Barber: I shall come to housing in a moment. Expenditure programmes on all these items as well as, of course, social security will continue as planned. The changes include no increases in charges.
Furthermore, because the changes are being announced well in advance, there should be no question of cancelling existing contracts.
In deciding upon the geographical spread of savings in individual programmes, the Ministers responsible will take account of the varying circumstances, including the load on the construction industries, the level of unemployment and the particular needs of the various parts of the country.
So that the specific changes can be strictly compared with the most recent Public Expenditure White Paper (Cmnd. 5178), they are expressed at 1972 survey prices.

The savings are as follows:

Roads:

Deferments for the time being of new schemes and a reduction in maintenance affecting both central and local government. The roads necessary to support Scottish oil developments will not be affected. The saving will be £100 million.

Miscellaneous Local Services:

This will involve deferment of approvals. A substantial part of the saving will come in the non-key sector, where the selection will be made by the local authorities themselves. Here again the total saving will be £100 million.

Local Authorities' Current Expenditure:

Out of a total estimated local authority current expenditure of nearly £5,000 million, there will be a saving of £80 million. The largest part of this—£50 million—is already included in the totals which I


have mentioned, particularly road maintenance. The rate support grant negotiations this autumn will proceed on the basis that these economies are being made. It is important that the new local authorities as well as the existing ones should be given this early notice of the changes.

Various Public Building Projects or Improvements:

In this area also, the Government and the local authorities will both make contributions, amounting to £15 million in all.

I should add here that there could be no question of incurring any expenditure on the proposed new parliamentary building during either this or the next financial year.

The Civil Service:

Figures are being published today—they may even have been published for all I know—which show that the total number of civil servants is now less than when we took office. By continuing to contain the growth of Civil Service manpower there will be a saving of £20 million on previous plans.

Selective Government Assistance to Industries:

As a result of the expansion of the economy, and the increasing ability of industry to finance its own requirements, the amounts which were at one stage envisaged are not now expected to be required in full, and there will be a saving of £35 million.

Defence:

We expect to maintain the defence budget in 1974–75 at broadly the same level as in the current financial year. A saving of £50 million will be found by economies and postponements of expenditure, including works projects. Our contribution to NATO will not be prejudiced.

The Nationalised Industries:

Those industries for which the Secretary of State for Trade and Industry is responsible, a saving of £100 million; the Post Office, £30 million; the surface transport industries £10 million. Investment in the nationalised industries will still be on a rising trend and fully adequate to sustain a faster rate of national growth.

Agriculture:

As our agriculture becomes more integrated with the common agricultural policy, the need for Exchequer aid will become less and so there will be a reduction of £25 million in expenditure in 1974–75 on current production grants.

Industrial Training:

It is important not only that the momentum of this programme should be maintained but that it should be increased. A further £6 million will therefore be added to the existing programme. The plans for meeting expenditure by the industrial training boards out of Government funds instead of out of levies will be deferred for eight months. The increased programme and this deferment will result in a net saving of £20 million.

I was asked particularly about housing. My right hon. and learned Friend the Secretary of State for the Environment has already announced a major switch of resources to housing. I can now inform the House that this priority for housing will involve additional expenditure in 1974–75 of £35 million—again, for convenience, expressed at 1972 prices. Taking this into account, and also the additional expenditure on industrial training to which I have referred, the total net saving in public expenditure for the next financial year, 1974–75, as a result of all these changes will be, at 1972 prices, some £500 million. These decisions will be reflected with estimating and other changes in the course of the year in the next annual White Paper.

As shown in the last White Paper on public expenditure, we start with the advantage that we had already deliberately planned for the rate of increase to begin to slow down during this financial year, by the end of which the special counter-cyclical expenditure which we put in hand in 1971 will have largely run its course.

I have explained why the various savings I have announced relate to the year 1974–75. I should also take this opportunity to give the House an assessment of how they will affect the present financial year, 1973–74.

The changes which I have announced for 1974–75 will build up gradually and will result in a saving in public expenditure in this year approaching £100


million. This saving will be in addition to the reduced provision which I foreshadowed in my Budget Statement and which, on present estimates, now amounts to a net reduction of about £225 million. Public expenditure this year is therefore likely to be over £300 million less than the figure in the last White Paper (Cmnd. 5178).

We have before us the greatest opportunity our country has had for very many years—an opportunity to achieve a faster and lasting improvement in our national prosperity. The changes which I have announced will ensure just that.

Mr. Healey: The Chancellor has just given the House a serious and lengthy statement which it will wish to consider, but I have no doubt that, through the usual channels, we can arrange to debate it in Government time at the earliest reasonable opportunity.
I recall predicting, when the right hon. Gentleman presented his mini-Budget not too long ago, that the real Budget would follow later. We now have a public expenditure component in the real Budget. Will the right hon. Gentleman tell us when the taxation component of his real Budget will follow?
The immediate impact of what the right hon. Gentleman told us is a certain increase in the price of food, postal charges and rates. I confess that I find it difficult to reconcile what the right hon. Gentleman has just said with what the Chief Secretary told the House only a couple of months ago when he said that he totally rejected the Public Expenditure Sub-commitee's conclusion that
our public spending over the next 12 to 18 months will constrain personal consumption to a rate significantly below that of total output. It just is not true."—[OFFICIAL REPORT, 12th March 1973; Vol. 852, c. 912.]
I should like to ask the Chancellor a question on personal consumption. In his statement, he said that he must allow for a reasonable rate of increase in personal consumption. What rate does he regard as reasonable? Presumably, according to the Chief Secretary, at least 5 per cent., which is the rate of increase in production at present. How does the right hon. Gentleman reconcile this estimate with an increase in the cost of living since the freeze running at 9·2 per cent.

compared with a year ago, although earnings have increased by only 2 per cent. as an annual rate since the freeze began?
The House will note that the main burden of the cuts proposed by the right hon. Gentleman falls on local government—there may be a recent reason for that—and on the nationalised industries. Will he tell us a little more about the implications of what he said regarding the rate support grant? Is he proposing to cut the nationalised industries' investment or to increase the prices at which they sell their products?
I was surprised that the right hon. Gentleman should take some credit for what he called a fall in the numbers of civil servants. He will be well aware that a few minutes ago his colleague the Parliamentary Secretary to the Civil Service Department told the House that there was an increase in non-industrial civil servants of 14,000 in the last year. Therefore, any decrease in the total number must fall entirely on industrial civil servants and follows from the hiving off of public enterprise upon which the Government have been engaged over the last year or so.
In the context of this very grave statement, may I ask the Chancellor to explain why he has had no new decision to announce to the House regarding Maplin?
Will the right hon. Gentleman assure the House that he will not allow the Prime Minister in this new and grave situation to agree with President Pompidou in the next two days on the construction of a Channel Tunnel the full cost of which has not yet been presented to the House and on which we have had no chance whatever so far to pronounce judgment?
Finally—we have asked about this matter so often in the past—in the context of this statement the right hon. Gentleman surely cannot now refuse to tell us where he is to find the £15 million which he is giving to the building societies to keep down mortgage interest rates.

Mr. Barber: The right hon. Gentleman referred to what he said in the course of the Budget debates.

Mr. Healey: What the Chief Secretary said.

Mr. Barber: No. The right hon. Gentleman started by referring to what he said in the Budget debates. He will also recall that in my Budget Statement, after referring to the work that I had put in hand before Christmas concerning public expenditure, I said that I would not hesitate at any time during the year to take action on public expenditure, on taxation or, indeed, on money supply. I made the position absolutely clear, and my hon. Friends will recall it even if the right hon. Gentleman does not.
The right hon. Gentleman mentioned taxation. After the Labour Government's record, I do not think that he should complain about that.
On personal consumption, the right hon. Gentleman will know that the trade union movement has repeatedly made it clear that one of the reasons that it found itself in such great difficulties with the Labour Government was that they allowed personal consumption during their period in office to sink almost to an all-time low. The right hon. Gentleman will find, when our period in office has continued until the next General Election, that we have a much better record on personal consumption than that of the Labour Government.
On the rate support grant, if the right hon. Gentleman looks at what I said he will find that I made it absolutely clear that the measures which I have announced will be taken into account in the negotiations for the rate support grant.
Finally, the right hon. Gentleman referred to Maplin. We have made the position about Maplin quite clear.

Mr. Powell: What has changed in the two months since my right hon. Friend's Budget Statement to cause him to make these announcements now?

Mr. Barber: My right hon. Friend will recall that in my Budget Statement I said that work has been put in hand on public expenditure. Therefore, I am now reporting to the House at the earliest opportunity the result of that work on public expenditure. I appreciate that it is difficult for my right hon. Friend to find anything which pleases him—even cuts in public expenditure.

Mr. Frank Allaun: Is there not a danger that the Chancellor will mislead the

country in this statement? He refers to an increase in housing expenditure of £34 million, whereas the Government survey for three years hence predicts a reduction of over £100 million. Therefore there is a net reduction of over £70 million.
Secondly, in the opposite direction, as regards arms expenditure, the Chancellor announces a cut of £50 million next year, which is precisely 1½ per cent. of our arms spending, whereas the Government survey plans a 10 per cent. increase in arms spending in the next two years.

Mr. Barber: I have made the position clear about the cut in defence expenditure. With regard to housing, I recall of course that in 1968, when an announcement was made by the then Government, which the hon. Gentleman supported, concerning public expenditure, there was a massive cut in housing expenditure.

Mr. Tugendhat: Is the Chancellor aware that this statement will receive very wide support in the country as a whole? Is he aware that the record of the economy with regard to investment, exports and output this year has confounded the fears of the pessimists and the hopes of the other side of the House, and that the Government are well on the way to securing a situation in which they will not only bring about a very rapid rate of growth but will also be able to moderate it instead of going from a rapid pace to a stop? Acting now rather than too late will ensure that.

Mr. Barber: I think it will be generally agreed that too often in the past action concerning public expenditure has been taken too late, in an atmosphere of panic and at a time of crisis. The action which I have announced today will, as I have indicated, have little effect in this financial year. Its primary purpose is to ensure that we are able to maintain steady expansion next year, 1974–75, and beyond.

Mr. Pardoe: Would the Chancellor say a little more about exactly how he is to save £30 million on postal services—by eliminating them altogether or by increasing their price? Will he also say something more about miscellaneous local services? How far will this reduction affect sewerage and water? Does he realise that the lack of these services is


holding back house-building in a very large number of areas of the country?

Mr. Barber: The programme for Post Office capital expenditure for the year in question, which is set out in the White Paper, amounts to well over £600 million. Therefore I think it wholly reasonable that there should be a reduction in that year of £30 million, which is not a very large percentage reduction in relation to a total programme of more than £600 million.
With regard to miscellaneous local services, the hon. Gentleman will know that capital expenditure in the local authorities falls into two categories. One consists of the key sector schemes, for which individual loan sanctions are still required. The other consists of the non-key schemes, sometimes called locally-determined schemes, for which the local authority is given a block grant. The major water and sewerage projects are in the key sector. Some minor projects are in the non-key sector, which are locally-determined, and it will be for local authorities, on the principle that we have always advocated, to decide where these savings should be made.

Mr. Brian Harrison: Could my right hon. Friend not find the solution to the problem of the over-heating of the building industry and the concentration of too much industry in the South-East by abandoning the Maplin project?

Mr. Barber: With regard to the construction industries generally, I think that the statement I have made today will be of considerable help in the next financial year. I can only say in regard to Maplin that the Government have made the position absolutely clear.

Mr. John Morris: Would it be fair to describe part of the proposals announced today by the heading "Chancellor cuts road programme"? While one has noted that the roads for the development of the Scottish oil industry are to be protected, will the Chancellor accept that the industrial development of South Wales is dependent upon the speedy building of the M4, with the provision of very necessary jobs? Is that now to be delayed?

Mr. Barber: Taking the total expenditure on roads throughout the whole

country, the savings will not slow down significantly the overall programme. I set out in my original statement—and I hope the right hon. Gentleman will look carefully at what I said—the way in which the geographical spread of any savings will be operated.

Mr. Ridley: In view of the fact that the retail price index has gone up even more in the six months following the standstill than it did in the six months before it, owing to heavy Government expenditure, may I congratulate my right hon. Friend most sincerely and warmly on taking this timely and proper counter-cyclical action? May I ask him whether he has in mind to do something about the charges for nationalised industry products, because it will be very difficult for him to get back to a commercial position for these industries unless he takes some action soon?

Mr. Barber: I am grateful for what my hon. Friend said in his opening remarks. With regard to the nationalised industry prices, the policy concerning these was made clear in a recent debate and also in the code for the guidance of the Price Commission.

Dr. David Owen: Will the Chancellor give some indication whether one of the factors which has made up his mind is the serious balance of payments position that may develop towards the end of this year? Will he now give the House an estimate of how he views the balance of payments deficit over the next year?

Mr. Barber: I must emphasise to the House and to the hon. Gentleman that the prime objective of the changes which I have announced today is the same as the prime objective of the previous Government—faster economic growth. The only difference is that we are succeeding where they have failed.

Mr. Hastings: While I quite understand the need for savings, will my right hon. Friend consider this? When young men on short service are returning for their third tour in Northern Ireland in a very short space of time and the Navy is apparently over-stretched to meet the modest commitment off Iceland, does he think this is the time for cuts in defence expenditure?

Mr. Barber: I made it clear in my statement—and I would ask my hon.


Friend to consider carefully what I said about defence—that our contribution to NATO will not be prejudiced and that the saving will be found by economies and postponements of expenditure, including works projects. Looking at defence expenditure as a whole and bearing in mind our obligations, I think that this is reasonable.

Mrs. Castle: Does the Chancellor's statement mean that Operation Eyesore, which is beginning to have an effect in the old industrial areas, is to be abandoned?

Mr. Barber: My right hon. Friend the Secretary of State for the Environment has already made clear the Government's policy on that.

Mr. Bruce-Gardyne: May I join in congratulating my right hon. Friend on the major step he has taken today towards bringing public expenditure and the excessive growth thereof under some control? Can he tell us what the percentage rate of increase in public expenditure will be during the current year and in 1974–75?

Mr. Barber: I am afraid that I cannot give the percentages offhand. Obviously they can be derived from the figures which have been given.
Replying to his first question, I know that this has been a particular concern of my hon. Friend, indeed of a good many of my hon. Friends. I think that the important point is that if one is looking ahead beyond this financial year it is very necessary, when one comes to the conclusion that action should be taken, that it be taken sufficiently early, so that the necessary consequences will proceed in an orderly way. This is what we have tried to do on this occasion rather than leave these decisions until the last moment to be taken in an atmosphere which is not conducive to a sensible and orderly procedure.

Mr. Harold Wilson: May I refer to the right hon. Gentleman's remarks about the Civil Service? Surely the right hon. Gentleman must know that the test in this House has always been the number of non-industrial civil servants. Is he not, therefore, misleading the House when he quotes the figure of non-industrials plus industrials? Has not the House been

given figures today which show that the non-industrial Civil Service has increased by 14,000 during his period of office, despite the hiving-off of sonic Government functions?
Secondly, he referred to the rise in the standard of living by comparing wages and other incomes with prices. Does he agree that, in six months of absolute standstill, as one of his hon. Friends has said, prices, on the Government's own figures, published on Saturday morning, have risen by between four and six times the increase in incomes during the first part of that year? On his own calculations, will the right hon. Gentleman now give a pledge that he believes that, over the year from the freeze last November, incomes will substantially exceed prices? Or does he now know that, over the year as a whole, prices will exceed incomes?

Mr. Barber: I have the figures here about the Civil Service. If one takes the total, which it is perfectly reasonable to do—[HON. MEMBERS: "No."]—of industrial and non-industrial civil servants, one will see that the facts are as I have given them. I assume from the silence of the right hon. Gentleman on this point that he approves of the saving of £20 million in expenditure on the Civil Service. I hope that we can make that assumption.

Mr. Wilson: Answer the question.

Mr. Barber: Turning to prices, the most important thing arising from my statement is that, by ensuring a sustained and more rapid rate of growth than we have experienced over the past decade or so, we shall make a significant contribution by that alone to greater price stability. This is the aim of the right hon. Gentleman and myself and of both sides of the House. I believe that the country knows that we are doing our best, and, what is more, that we shall succeeed.

Mr. Wilson: Yes, but will the right hon. Gentleman now answer at least one of my two questions, since he has so far answered neither? Does he agree with the Prime Minister that, on the test always applied by Governments, the number of the non-industrial Civil Service has risen, as the Prime Minister told the House a couple of weeks ago? Second, does he agree that, in the so-called freeze period, prices were rising at 9·2 per cent. per


annum and wages hardly at all? Will he now say whether, over the year from 6th November last, he expects prices to have increased more than wages or wages more than prices?

Mr. Barber: On the point about the Civil Service, the figures are clear and for all to see. That is true, and it was referred to by my hon. Friend, I gather, when he answered the question. The total number of the Civil Service, industrial and non-industrial, has gone down. On the second point, the right hon. Gentleman knows that when he was in office he never once gave forecasts, and would never have condoned any of his Ministers giving forecasts, of prices or earnings during the year ahead.

Several Hon. Members: rose—

Mr. Speaker: Order. I want the help of the House. This is Private Members' time and there is also an important statement to be made on Icelandic fisheries. I can allow only a couple of further questions from each side on this statement.

Mr. Norman Lamont: Is my right hon. Friend aware that his announcement is very welcome to this side of the House since it will free the resources to underwrite the Government's commitment to 5 per cent. expansion? Is it not also the case that the Government have had considerable success since the Budget in funding the net borrowing requirement? Does not that, with today's announcement, mean that the rate of increase in the money supply can be expected to moderate somewhat in the next few months?

Mr. Barber: The figures published today show a welcome reduction in the rate of growth of M3 but, in fairness, one should say that we should not read too much into a single month's figures. As my hon. Friend will know, there have been a number of special features in recent months which make interpretation of the figures particularly difficult. As to the sale of gilt-edged by the Government, it is generally known that we have been very successful in recent weeks.

Mr. Robert Hughes: Is the Chancellor aware that the Scottish economy cannot stand much deflation? Will he tell us today, unequivocally, that he will allow REP to continue, as has been called for by the CBI, the trade unions and everyone else?

Mr. Barber: We have made it clear that there will be a review concerned with the phasing out of REP. That review will take place as we said it would.

Mr. Biffen: May I join those of my hon. Friends who have extended a welcome to this very prudent reassessment of forward public spending? However, will my right hon. Friend also acknowledge that some of the more innocent Members might assume that there was something somewhat symmetrical about a figure of £500 million and might fear that that was the first figure chosen and that the process worked backward from that? Could he allay those suspicions by publishing a White Paper showing what projects will be affected by this statement, so that we may assess the social judgments that lie behind it?

Mr. Barber: The implementation of the savings obviously varies from case to case. These will be matters for the individual Ministers who are concerned. But I should tell my hon. Friend, since he has posed the question, that the right way to deal with public expenditure in demand management is to decide first what is necessary; then, if it is necessary to make a net reduction, to decide what that reduction should be; and then to find the means of achieving what one considers to be necessary. That is precisely what we have done.

Mr. English: Many of the right hon. Gentleman's expectations of expansion depend on a decision on which he should be congratulated—namely to float the pound. Does his announcement of these figures so far ahead mean that he is guaranteeing not to refix the pound at the behest of any European Power, so that we can continue with this expansion?

Mr. Barber: I have made the position absolutely clear concerning the relaxing of the pound.

ICELANDIC FISHERIES

The Secretary of State for Foreign and Commonwealth Affairs (Sir Alec Douglas-Home): With your permission, Mr. Speaker, and that of the House, I wish to make a statement.
Since 5th September 1972 British trawlers fishing on the high seas have been systematically harassed by Icelandic coastguard vessels. During all that time, in order to assist negotiations British naval vessels have been kept outside the area.
Lately, despite repeated warnings and although negotiations were in progress, the Icelandic Government continued and intensified their harassment and it became clear that they were making a determined effort to drive British vessels from the area by force. A critical situation was reached on 14th May, when there was an unsuccessful attempt to board a trawler and live ammunition was used by a coastguard vessel.
After consultation with the industry the Government concluded that it was no longer possible for British vessels to fish in safety without protection. Naval vessels were therefore ordered into the area on 19th May. They will take only such defensive action as is necessary to protect British trawlers exercising their lawful rights to fish on the high seas.
British naval vessels are, of course, fully entitled in international law to operate freely in this area of the high seas. They will, however, be withdrawn at any time if the Government of Iceland will cease harassment of British trawlers.
It is still the Government's desire to settle this dispute by negotiation. Pending such a settlement, we shall, however, authorise trawlers to catch up to the limit of 170,000 tons indicated by the International Court. We shall also pursue substantive proceedings before the court and shall continue to seek longer-term solutions in the Law of the Sea Conference.

Mr. Crosland: The Government's decision has our full support and has of course been warmly received in all the fishing ports. Both the Government and the industry have been behaving with exemplary patience in the face of growing provocation from the Icelanders. I

have great sympathy with the skippers, who eventually got to the point of saying that they would not go back unless they were guaranteed protection.
I should like to put two short questions. First, can the right hon. Gentleman assure us that the Navy will not insist on fishing being carried out in tight boxes? If that were insisted on, it would be very hard to catch the 170,000 tons, a most important point, which the right hon. Gentleman was right to mention. Second, will he use every method at his disposal to make it clear to the United Nations and elsewhere in the world that this decision by the Government is in no way an aggressive decision? It is a defensive decision, taken in the face of aggressive action by another Power. The whole object is to enable our fishing fleet to carry out its proper and peaceful purpose of catching fish for the British people.

Sir Alec Douglas-Home: I am grateful to the right hon. Gentleman for his approach to this matter. We will not insist on tight boxes, but the Navy must be able to advise the best way in which protection can be given. Certainly we shall take every opportunity in every international organisation to tell the truth about this matter, which is, as the right hon. Gentleman said, to continue objecting to harassing.

Mr. Mather: While I welcome this move, could my right hon. Friend confirm that it is only through great good luck that British trawlermen have escaped serious injury or loss of life in the last few months? On how many occasions have trawls been cut, and how many shots have been fired by Icelandic gunboats?

Sir Alec Douglas-Home: I think I should require notice of the latter part of that question, but a very considerable number of trawls have been cut over the period of the last few months, as I have described. Shots have also been fired, sometimes with blank ammunition and on some occasions with real ammunition, and in the past few months there has been a real risk of loss of life.

Mr. James Johnson: Is the right hon. Gentleman aware that the Government announcement at 4 p.m. on Saturday last gave deep satisfaction to all in the fishing fleets, to the fishermen and trawler owners and their wives and families? We will


back up the Government in the actions they are taking. Can the right hon. Gentleman confirm, however, that, while the initiative was taken because of the fishermen's ultimatum, the Joint Action Committee is solidly behind the Government, of course, in taking this decision? We all believe that the step taken of sending in the Navy was quite inevitable in view of Iceland's decision.
Lastly—and I say this in no chauvinistic way and in no gunboat attitude, but I speak as a member of a fishing port constituency—my colleagues with a deep interest in the fishing industry and I say in no chauvinistic or gunboat spirit that we hope the Navy will behave not in an aggressive way but in a purely protective fashion for our skippers and their boats.

Sir Alec Douglas-Home: I think the industry all the way through has understood the reluctance of the Government to put the Navy in. The industry has been very patient and very co-operative, but the moment came when everyone agreed that this was necessary. The Joint Action Committee certainly supports the Navy's action as this is a protective action that we have taken.

Mr. Wall: While I also welcome this statement, would it not be wise to realise that the Icelandic Communist Party will do everything it can to get Iceland out of NATO? Will my right hon. Friend do all he can with our NATO allies to explain the provocation we have had to endure and that we have had eight months of continuous negotiation? Will he seek the co-operation of the German navy, as German trawlers are also subject to harassment in the Icelandic waters?

Sir Alec Douglas-Home: We raised this matter in the NATO Alliance this morning. We are in very close touch with the Germans because they are in a somewhat similar plight, but I cannot commit their navy.

Mr. Thorpe: Is the right hon. Gentleman aware that many of us believe that there will be no lasting settlement save through negotiations and an agreed settlement on both sides, but is it not a fact that the Navy is protecting trawlers in a section of the ocean unilaterally annexed by Iceland, according to the International

Court of Justice, in breach of international law? Will he indicate our readiness to submit the legality of this action to the International Court on the assumption that both sides accept the outcome?

Sir Alec Douglas-Home: Yes. We are certainly trying to submit this matter to the International Court. The Icelanders have said that they do not accept its jurisdiction, although the International Court of Justice does have jurisdiction in this matter. A convention has been in force between two willing parties which Iceland registered under the Treaty in 1961.

Mr. Jeffrey Archer: I thank my right hon. Friend on behalf of owners and skippers in my constituency for the speed with which the Navy moved on Thursday after a request had been made by them. The only vital thing to my constituents is the size of the catch. If we are to negotiate, as I hope we will, we should remember that 170,000 tons was the agreement of the International Court, 145,000 tons was the figure we came down to, and that the 117,000 considered by the Icelanders is not sufficient and not worthy of consideration.

Sir Alec Douglas-Home: The answer to that question is "Yes, Sir".

Mr. Goronwy Roberts: May I put two short points to the Foreign Secretary? He is, I am sure, aware that this House —and indeed informed world opinion generally—fully endorses the view that our vessels in these waters are there with the full sanction of international law. Following upon the point made by the right hon. Member the Leader of the Liberal Party, what is now in jeopardy is a freely negotiated convention between two countries, freely signed and sustained for a long time, but abrogated unilaterally.
Secondly, will the Government continue to make absolutely clear, particularly to the Icelandic Government, that as soon as this harassment ceases and there is an opportunity to engage in realistic negotiations our naval presence will immediately be removed?

Sir Alec Douglas-Home: Our vessels are in these waters strictly in accordance with international law and according to the legal agreement between two


sovereign Powers. On the second point the right hon. Gentleman has laid his finger on the essential condition, of course. Harassing must stop; then we can think again and negotiate again.

Mr. Heffer: Is the right hon. Gentleman aware that, despite the attitude adopted by most hon. Members present, it is not universcally welcomed that the Navy should go in? Is he aware that we understand the feelings and desires of the workers and trawler owners in the ports, but the Icelanders have a considerable case which has never been expressed in this House? These people have absolutely nothing except their fishing?

Mr. James Johnson: That is not so.

Mr. Heffer: My hon. Friend says that that is not so, but everyone, to be honest, knows that Iceland depends on its fishing, and if that is taken away these people will have nothing. We must not act, as we have acted in the past, as a imperialist Power using the full weight of our strength against a small nation. Is it not time that we got back to the negotiating table to reach an agreement with these people rather than acting in the way we have done?

Sir Alec Douglas-Home: None of us in this House welcomes the fact that the Navy had to be sent in. It almost goes without saying that we were very reluctant to do it, and it took us eight months of suffering harassment before we finally decided that we had no alternative. I remember recalling to the House only a week or so ago that of course we understand that the Icelanders depend on fishing—it is their livelihood—but a negotiated settlement according to the International Court or the terms which we offered would not strike a blow against the Icelanders.

Mr. Goodhart: Is my right hon. Friend aware that no one in this Houses wishes to bully our allies in Iceland? But if, alas, the need for the patrol continues, and if there is difficulty in finding ships for this patrol, can he confirm that the Iceland patrol will have priority over the Beira patrol?

Sir Alec Douglas-Home: I do not think it will be necessary to make a choice. We have sufficient vessels.

Mr. Donald Stewart: Apart from the views expressed in the House, may I ask the right hon. Gentleman whether he is aware that throughout the country, in many of the fishing ports, there is by no means total support for his policy which some hon. Members pretend or imagine there is? Is he further aware that the spectacle of Great Britain claiming oil 150 miles from our shores is not a good example to set when we are seeking to prevent Iceland from protecting its sole source of income only 50 miles from its shores? Does he appreciate that the case will eventually be won by Iceland and the sooner this gunboat diplomacy comes to an end the better?

Sir Alec Douglas-Home: I do not know whether there is total support in the country for this policy but on the evidence we have heard in the House today there is quite a lot of support for our action and I would have thought that it was strong majority support.

Mr. Heffer: Some people have not got the courage to stand up.

Sir Alec Douglas-Home: Perhaps the hon. Gentleman will tell us how long we are expected to wait, being harassed, without any retaliation whatever. This is one small nation using force for political purposes, and it cannot be tolerated. We are always ready to conciliate and negotiate. I hope that we will be able to resume doing so.

Mr. Cledwyn Hughes: Is the right hon. Gentleman aware that, while we all regret being at odds with Iceland in this matter, and while we understand the feeling of my hon. Friend the Member for Liverpool, Walton (Mr. Heffer), the David and Goliath argument is not valid in this case because it is David who is behaving illegally? Will the Foreign Secretary consider publishing a White Paper setting out the history of this unhappy disagreement as soon as possible?

Sir Alec Douglas-Home: I will consider that if the House feels it would be useful.

Miss Quennell: Arising from the remarks of the right hon. Member for Devon, North (Mr. Thorpe), may I ask my right hon. Friend to clarify the exact circumstances of the territorial waters around Iceland? Is it not right that


Iceland claims a 4-mile limit on territorial waters, later extending her 12-mile limit for fishing purposes and that the present 50-mile limit is for fishing purposes and is not here territorial waters?

Sir Alec Douglas-Home: My hon. Friend is right on all counts.

Mr. McNamara: Is the right hon. Gentleman aware that in the past I have been very much against cutlass-rattling but that I have come to the inevitable conclusion that recent incidents which have taken place have reluctantly forced the hand of the Government? Is he further aware that publication of a White Paper as suggested by my right hon. Friend the Member for Anglesey (Mr. Cledwyn Hughes) would be widely welcomed because there is a great deal of education to be done in this country too about our dependence upon the fishing industry in this country as they are in Iceland? While we all concede that the Icelandic Government and people have a real, serious and deep interest in this, is it not the case that the people of England, particularly of the fishing ports, have an equally great interest? Will he confirm that all we are looking for is an interim agreement of two and a half years until the whole matter can be settled by all countries concerned at the conference on the law of the sea?

Sir Alec Douglas-Home: I have always recognised the hon. Gentleman's reluctance, in which I may say he was very wise, to take further action. As he has said, the moment has come when we could not help ourselves. I will seriously consider the proposal for a White Paper. I agree that it would be useful.

Mr. Wilkinson: Will my right hon. Friend undertake never to miss any opportunity to press on our Icelandic friends that, notwithstanding this serious dispute, there are greater interests that unite us, that there are greater dangers in these northern waters than the one they fear at the hands of the British? Can he clarify the statement reported in the Press today that British military aircraft are unwelcome in Iceland?

Sir Alec Douglas-Home: I will have to get a little more information about the action the Icelanders have taken with regard to British military aircraft. This

matter is a peripheral one for us; nevertheless it is something within the NATO Alliance which should not happen between allies.

Mr. Paget: Is the right hon. Gentleman aware that, contrary to the view of some of my hon. Friends, there are occasions when, greatly daring, it is necessary to raise a small and dissident voice in favour of the rights of the strong against the weak? Is it not time that we did so?

Sir Alec Douglas-Home: I agree.

Mr. Wellbeloved: Will the right hon. Gentleman bear in mind that, while we would all like to see this dispute settled by the process of free collective bargaining, all sensible opinion in the Labour movement believes that workers both by land and sea are entitled to protection when they go about earning a living for their family and for the prosperity of the nation?

Sir Alec Douglas-Home: Yes, Sir. Our citizens must be able to go about their lawful occasions without being molested.

KIROV BALLET (ENTRY PERMITS)

Mr. Normanton: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
The need for the immediate revocation by the Home Secretary of the entry permits granted to the Kirov Ballet in view of the threat to public law and order posed by their presence in Manchester tonight.
I have to inform the House of the increasingly serious situation in Manchester and crave the indulgence of hon. and right hon. Members in listing a few of the essential facts. At 7.30 tonight a number of public demonstrations are planned in the City of Manchester. These are organised by people who see the visit of the Kirov Ballet and the presence of Deputy Chairman Gogolev of the Leningrad Soviet as an affront to all self-respecting, responsible citizens in Greater Manchester.
Having tried by all recognised constitutional and legitimate means to draw


the attention of the Government of the Soviet Union to the universal disgust of the British people and hon. and right hon. Members at the continued anti-Semitic practices prevailing in that country, my constituents and many thousands outside my constituency feel that they have reached the end of the road. I earnestly hope that tonight's demonstrations will be peaceful, but this House should be alerted to the serious breakdown in law and order if the Kirov Ballet performance is allowed to take place. I ask you therefore, Mr. Speaker, to grant leave for a debate on this important issue to take place at the earliest possible opportunity.

Mr. Speaker: I am obliged to the hon. Member for having given me notice of his intention to make his application. My ruling does not bear upon the merits and is no reflection upon the accuracy or inaccuracy of what the hon. Gentleman said. Mine is simply a procedural decision. I do not think that this is an appropriate matter to be debated under Standing Order No. 9.

BUSINESS OF THE HOUSE

Ordered,
That, notwithstanding the Order [1st November] relating to Business of the House, the ballot for Private Members' Notices of Motions which are to have precedence on Monday 7th June, but shall stand over until Tuesday 12th June.—[Mr. Pym.]

WORKERS' SAFETY AND HEALTH

4.27 p.m.

Mr. Neil Kinnock: I beg to move.
That this House considers that there is an urgent need for generally improved provision for safety and health at work including extensive education of workers and employers and new comprehensive legislation to deal with precautions against and consequences of industrial accidents and diseases.
I have chosen to move this motion for two reasons. The first is personal. I am the first male member of my family for about three generations who can have reasonable confidence in expecting that I will leave this earth with more or less the same number of fingers, hands, legs, toes and eyes as I had when I was born.
I am unlikely to know the infuriating itch of dermatitis and if my lungs or my limbs do not function properly when I am 50 it will not be because I have been forced to work in an atmosphere in which I am obliged to breathe filthy air in cramped and unnatural working positions. My father, my grandfather, my uncles have all suffered from various industrial injuries and diseases I am fortunate, I suppose, in being the exception to what has become the general rule in mine and many other working-class families.
These injuries and diseases have been inflicted not as a consequence of some dreadful cataclysm but simply because the male members of my family like most other male members in families throughout the country, have done nothing more adventurous than go to work in the coal steel and engineering industries.
If working-class families were to take a kind of fitness survey, an injury inventory, of themselves, they would be able, without much difficulty, to list asthmatic, rheumatic, maimed and lamed female and male members, all the injuries and diseases having been collected merely by going to their places of employment.
But ordinary people would not undertake such an exercise. They would think that it was self-pity, a kind of hypochondria. Nevertheless, the scale of accidents and diseases puts into true perspective the kind of problem that is presented by the matter of health and safety at work. The sheer spread of the state of affairs that I have described is


appalling. It is awful in the truest sense of the word. It is sad. For this House the most important thing is that it is unnatural and unnecessary and we are in a position to do something about it.
My second reason for introducing the debate is rather less subjective. In July, 1972 the committee of inquiry into safety and health at work reported, and at the time of the introduction of the report the Secretary of State for Employment said:
The Government are convinced that reform is now a matter of considerable urgency in an area of such great importance to all employees, and it is their intention to take early action towards achieving the broad objectives of the report. I am therefore giving urgent consideration to the specific recommendations of the Committee."—[OFFICIAL REPORT, 19th July 1972; Vol. 841, c. 618.]
The first birthday of the report is coming near, and I do not think we should let the anniversary pass without marking it.
The Prime Minister, in announcing the establishment of the Pearson Commission on civil liability and compensation for personal injury, repeated that the Government had given urgent consideration to the matter and looked forward, as he said in answer to a question, to making
a statement fairly soon after we resume in the New Year".—[OFFICIAL REPORT, 19th December 1972; Vol. 848, c. 1121.]
It is now 21st May, and the delay in introducing a Bill or even debating a vital matter such as the Robens Report is outrageous. I hope that this delay, this prevarication, does not betray a reluctance by the Government to introduce necessary and major improvements in provision for health and safety at work, and we shall listen closely to every word that the Minister says this afternoon. I hope that he will give a more meaningful undertaking than that given by his right hon. Friends, for if he does not millions of workers at risk will feel that their essential interests have been betrayed.
This is a complex area for discussion. There are interests to consult and to accommodate. Any new legislation will form the basis of our provision for health and safety at work for many years to come. Haste would be most inappropriate, but any further delay

would be unacceptable, and I hope that we shall soon see an end to the delay that has meant that for many years we have made no major improvement in provision for health and safety at work.
Every year about 1,000 people are killed at work, about 500,000 are injured in accidents, and 23 million working days are lost as a consequence of accidents and industrial diseases. Outside those statistics, there are unmeasured thousands suffering from the effects of their working conditions. They are physically disabled, mentally distraught, and poisoned. They are physically reduced, their income is reduced, their lives are shortened and their family and domestic lives are disordered.
Unknown numbers—we are becoming increasingly aware of this—may be working in hazardous conditions or with treacherous materials and unaware of the risks being taken with their lives and their safety. Recent stories from medical laboratories serve to emphasise that. People are working with materials without realising they are at risk and without taking any real precautions against permanent, lasting and debilitating injuries.
There are new processes, new substances and new techniques which create new demands for extensive improvements in our provision for precaution against and prevention of injury and disease. But our system of safeguards, of supervision and of improvement has failed, is failing and will continue to permit avoidable tragedies until it is radically changed.
There are numerous instances of workers contracting cancer as a consequence of their work. Deaths from asbestosis over the past years are counted in hundreds. Deafness is still not classified as an industrial disease, although it is estimated that 500,000 workers are exposed to noise levels for long enough to place their hearing at risk. In the last 10 years an average of 16 men a year have died in the construction industry as a consequence of trenches collapsing. Bronchitis and respiratory diseases are not yet industrial diseases despite scientific proof that certain occupations cause or aggravate chest complaints. Dr. Treacher, of Bristol University, has estimated that one in three British workers is likely to he affected by mental diseases


of some kind during their lives, and David Ennals, of the Mind Campgain, says that 31 million working days were lost in 1970–71 as a consequence of mental disorders among working people.
Our system is obviously not fully committed, and never has been, to taking the risk out of work. Until it is committed to that aim we are not equipping ourselves to deal with the problem, in a way that can be expected of a civilised Parliament in a civilised society.
Against that background, we must consider the most recent and presumably the most authenticated proposals for changing the present system—namely, the Robens Report on Health and Safety at Work. Much of the report's analysis has been widely accepted for a considerable time: there is widespread apathy to health and safety provision in industry, much of the existing legal provision is unintelligible and obsolete, the administration of our health and safety system is fragmented, the subject fails to command the interest given to more dramatic aspects of industry—such as induistrial relations.
Anyone who had worked in a steel works or car plant for a fortnight could have told the committee that in 10 minutes, let alone the large number of experts from both sides of the industry, from the law, from the medical profession and from the inspectorates who were only too willing to let the committee know that.
Equally likely to bring agreement are the proposals to tidy up the provisions for health and safety at work. A unified inspectorate is sensible. A single comprehensive Act embracing the library of statutes which cover health and safety at work and other legislation is obviously necessary to deal with public health aspects of work. The proposal to extend legal coverage all Britain's workers must bring universal agreement, and a national authority for safety and health at work will provide a much-needed expertise, long-needed co-ordination and a welcome expansion of research.
But if my welcome for that aspect is somewhat guarded, I have to qualify it by asking the Minister whether his Department has given further consideration to extending the provisions recommended by Robens to agricultural workers. There is a great deal of disquiet among agricultural workers, including their union, that aspects of the national autho-

rity and, indeed, the new legislation in the health and safety sphere will not cover them, for extensive reasons. A great body of opinion amongst agricultural workers thinks that they should be treated in the same way as other workers when we come to improve health and safety provisions.
The proposal, probably long overdue, that company reports should include information about accidents and diseases and a statement of company policy about its attitude to accidents and diseases at work is also a step in the right direction. They are the sane, sober and unexceptionable aspects of the Robens Report.
Having said that, I submit that the report has a grievous deficiency which makes it an inadequate basis for the kind of action required. Audacity, the quality that is most sorely needed in bringing about a meaningful change in this sphere of affairs, is completely and totally absent from the report. Wherever possible, the report seeks to cajole rather than coerce. This would be ideal if we already had a system with a general and genuine will drastically to reduce accidents and disease, but we have not. The report is afraid to give any support to the concept of giving workers any meaningful power in matters of health and safety. The training of workers' safety representatives—we would need about 150,000 to do the job adequately—is completely ignored. The report makes no recommendations about the size of safety and health inspectorates. It appears to accept without reluctance that extra financial resources from industry and Government will simply not be made available for the improvement of these provisions.
The scale of the problem of industrial health and safety in Britain and the precedents set in American industry would have justified the suggestion by the Robens Committee that we should have a safety levy system that is comparable with the training levy system, but such a suggestion was much too audacious, apparently, for the committee and no such suggestion was made.
The report is completely negative about occupational medicine. When 314 million working days were lost because of sickness in 1970–71, when two committees of inquiry, a Royal Commission, a British Medical Association report, the International Labour Office and the Trades


Union Congress, along with many employers and even federations of employers, have all recommended occupational health services of various kinds, such an omission from this comprehensive report gives an accurate perspective of its weaknesses. Even where it tends to challenge parts of the existing pattern, as for example in its comments on the level of fines for offences against the Factories Acts, the report is cautious and inconclusive.
I believe that these major defects are the direct consequence of a fundamental confusion about the reason for the shortcomings in the present system. The report asserts that the most important single reason for accidents at work is apathy. There can never have been a safer truism in the whole history of report-writing. But the main reason given for this all-consuming and fatal apathy is the facile axiom that it has been brought about by having too much of the wrong kind of law in health and safety. Workers and employers rely too much on State regulation and rather too little on personal responsibility and voluntary self-generating effort, the report argues.
As a charter for the Outward Bound scheme those sentiments may be admirable, but as a diagnosis of a major killer disease in this country they are totally inadequate. Certainly our system of law fails to goad the lazy or the indifferent. It might even provide an alibi for those whose health and safety provision is grudging. But to suggest that the law is the main cause of apathy is a distortion of reality. It is like saying that the crutch has made the cripple.

Mr. Paul B. Rose: Does my hon. Friend agree with the proposition that it is not the law that is inadequate but the fact that the law has not been operated adequately and has not been enforced with the authority it needs in order to coerce employers to comply with it?

Mr. Kinnock: To the regret of the House, that is a point which I shall be pursuing at much greater length later in my speech. I agree with my hon. Friend. He made a true summation of the precise situation as it exists in British industry.
Apathy exists because it has one undeniable attraction for the feckless and

the reckless in industry. Apathy in the short term is a great deal cheaper than action. Listlessness, carelessness, and stupidity are all much cheaper than proper provision for health and safety at work. Full and rigorously observed safety precautions can slow down work. The provision of safety aids is expensive and the supervision of safety provisions is onerous. All demand specialist staff and costly materials. The penalties for permitting apathy to kill or maim or poison are trivial—except for the victim. The maximum fine under the Factories Acts is £300, yet the average fine paid in 1970 was £40. In 1971 there were 268,000 reported accidents and only 1,330 prosecutions—one prosecution for every 200 accidents.
Apathy is therefore not penalised at a rate which provides an incentive for employers to ensure safety at work. Apathy can even be insured against. It is no exaggeration to say that the reaction of many firms to a serious accident is that the wife of the victim gets a bunch of flowers and free use of the company car from a genuinely sorrowful and sympathetic management and then it grabs for its insurance policy as quickly as it can. Management is not being malicious or malevolent. It is not early-Victorian in its outlook. It is sorry that the accident has taken place, but when it comes to taking real precautions against a recurrence of a similar accident, it is lacking.
Apathy towards industrial health and safety owes far more to the cover against common law damages which is available than it does to inflexible or unintelligible law. The employer reaches for his insurance policy. The trade union interest at shop floor level is regrettably often based as the Policy Holder Insurance Journal puts it
on obtaining good settlements of injury claims for their members rather than tackling the source of the injuries.
I once had experience of a fellow worker explaining to me how the loss of a little finger on the right hand had permitted himself and his family to go to Italy for their holidays the year before. There is a kind of fatalism about industrial accidents. We must aim dramatically to disturb that attitude on both sides of industry.
There is a definite relationship between prevention and compensation. This relationship in the minds of bosses and workers and the reality of the working situation is a major cause of apathy and complacency. The Robens Committee chose to interpret its terms of reference in such a way as to avoid any real consideration of this relationship. That choice undermines the validity of all of the committee's work. Even worse is the fact that the committee recommended a reduction in statutory regulations in favour of voluntary codes. If adopted, such a system would, according to R. C. Simpson writing in Modern Law Review,
reduce the extent of the civil remedy of an action for damages for breach of statutory duty which is open to injured workers".
I cannot believe that the Robens Committee consciously sought to concentrate minds in industry on accident and disease prevention by depriving workers of common law protection. Any changes which result from the implementation of the Robens Report must be introduced with this danger in mind. The attitude of the report to apathy and its faith in voluntarism and persuasion are a product of the self-identified general philosophy of the report: the explicit belief in the catalytic value of self-regulation in health and safety matters. The logic which seems to have been employed is that "much of our system is wrong because we have too much of the wrong kind of law. If we have less law, we shall have more safety."
That reasoning is either a return to laissez faire or it is a naїve belief that since 1833, when the first Factories Act was introduced, employers have learned their lesson and, because most of them are decent human beings, they will never take decisions that would cause injury or disease to workers. In either case, whether it is laissez faire or naїvety, the Robens Report is based on a totally fallacious assessment of the value of self-regulation in industrial health and safety matters.
History and reality, the past and the present, argue very forcibly against the idea that British industry is yet fit for self-regulation. The only people who can conceivably accept that conclusion are the very people who are currently the major offenders. Responsible managements in companies making full provision for accident and disease prevention—there are

some of them—would have absolutely nothing to fear from a more stringent system of legal control.
The reaction of the trade unions is on record. Peter Jacques, secretary of the TUC Social Insurance Committee, has said:
Just because bad law is ineffective, it does not mean there is no place for good law. Law reflects the priorities of the community. It sets a standard which employers must meet, and provides a basis whereon employers can improve conditions. We need the firm statement which only well drafted law can give.
That is our business in this House.
The opinion is echoed by authoritative voices, like that of Mr. Mainwaring, former HM Deputy Chief Inspector of Factories, who has said:
It has become fashionable …to play a game of codes of practice versus statutory regulations. …The Committee is putting too much faith in human nature unless the codes of practice can be used effectively by inspectors via the notices of improvement and prohibition and, in appropriate circumstance, the criminal court.
Again, a case is made for better law and a request not to put too much faith in the human nature of managements and workers.
Academic specialists have reiterated the feelings of Eric Young, of Strathclyde University, reported in the Scotsman of 9th November 1972:
The Robens Report has many virtues but its recommendations on enforcement seem unlikely to do much to cure the basic problem of apathy.
Mr. W. H. Thompson, a solicitor widely known and respected among trade unionists, wrote in a virulently critical memorandum on Robens:
Self-regulation is a euphemism: it means no regulation at all.
No one could have put it more aptly than Mr. Thompson, with his background of experience in industry.
The fact of the matter is that we already have a self-regulatory system of industrial health and safety. There is a framework of regulation and there are inspectorates. But the safety net is so loosely cast that the offending fish almost have to volunteer to be caught.
The self-regulatory system which we have means that industry spends a trivial 0·05 per cent. of its total research and development budget on research into


safety. It means that only 8 per cent. of workplaces are served by joint worker-employer safety committees. This is a fourfold improvement on the 1965 figure —a rise which resulted directly from Government threats of compulsion. It means, as the Robens Committee said, that safety audits are very rare, that there are very few full-time trained professional safety officers in industry and that few, if any, employers' organisations have any safety function.
Most of all, it means that the Chief Inspector of Factories, Mr. Brian Harvey, who is not given to overstatement, could say in his annual report for 1971:
Perhaps the greatest obstacle in the way of further improvement is the sheer indifference of some companies to the safety of their workers …there is some evidence that high accident rates in industry are a symptom of more fundamental management failures.
That assessment is backed by black statistics. In 1967–71 managements were solely to blame for one in three accidents and partly to blame for three out of four accidents.
Mr. Harvey is understandably reluctant to turn his inspectors into hanging judges and bring every breach of the law to prosecution. As his predecessor once remarked, it is a time-consuming business. When the total inspectorate established under the nine major statutes numbers just over 1,000 and there are 1¼ million establishments in Britain, it is small wonder that there is great hesitation at the prospect of an inspector wasting a whole day in court when there are a large number of establishments to be visited and there is a great deal more work to be done in the field.
It is small wonder that Dr. R. W. Rideout, in his research paper for the Robens Committee, could say:
The Factory Inspectorate have long passed beyond the permitted limits of moderate enforcement to a stage that is not enforcement at all
In other words, we already have a self-regulatory system, simply because we have not made provision for that system to be regulated in any other fashion.
Mr. Harvey has justifiably decided that the inspectorate must play a watchdog role and help and advise employers on improvements. Robens sees that rôle of

help and advice as a permanent rôle for the future, but it was an intelligent expedient forced upon the Factory Inspectorate by the sheer shortage of numbers. I do not think that Mr. Harvey or any of his inspectors saw it as a permanent development.
For the Robens Committee to suggest that that is the way in which things should continue in a new system is a counsel of despair, based on penny-pinching economics and a stagnant imagination, in a field that required audacity and imagination if the report was to make a major contribution to the subject. This kind of reasoning, if applied, will perpetuate the system of self-regulation which has allowed such barbaric failures in safety and health provision.
Mr. Harvey, by contrast, does not seek to make such a virtue of necessity as does the committee. Even with a small and overworked inspectorate, he is still prepared to say in his 1971 report:
Unless industry is prepared to put significantly greater effort into controlling the hazards it generates, the Inspectorate will have no alternative but increasingly to use Section 54 of the Factory Act, which provides for unsatisfactory plants to be closed down until adequate control measures have been provided or the plant redeveloped to minimise the risk of injury, in spite of the unfortunate economic effects on the company, its employees and the community.
Even more reassuring to those who do not share the confidence of Robens in self-regulation are Mr. Harvey's words:
If it is not possible to develop adequate measures of controlling the hazards which some processes create, then industry may well have to take a decision not to develop a particular plant or process until the way ahead for both workers and the environment is clear … Time and money must be lavished on protecting employees and the community in the same way that it is lavished upon improving industrial techniques and developing new ways of manufacturing.
That is the kind of uncompromising statement of aims that we should be settling for ourselves in this House now. Those words come from a Chief Inspector of Factories, not from a trade union militant or a doom-watcher, but from someone actively engaged in the field, in every respect a realist, with a great deal of wisdom and expertise to back up what he says. They should guide the attitude of parliament and the country to health and safety provision in future.
The failure of our system is not that of the Factory Inspectorate or any of the other bodies responsible for enforcement. The fault lies in the system of nine major statutes and over 500 subordinate statutory instruments—a complex and confusing world. It lies also with indifferent managements. Sometimes their indifference is assumed. Sometimes it serves an economic purpose, but in the long run it causes tragedy.
But some of the fault lies with workers who think that protective clothing is cissy or a slight against their manhood or their beauty. That kind of attitude must be destroyed by education and by example.
In as much as successive Parliaments have tiptoed gingerly around the subject of health and safety at work, part of the blame for the inadequate system must reside with us.
There is a definite link between the existence of apathy and the absence of stringent, effective and punitive laws. It is irresponsible to hope that industry will free itself from apathy until, first, the excuses for apathy have been removed by a thoroughgoing system of education and training in safety and health provision and, secondly, the penalties for apathy make carelessness, oversight, inefficiency and ignorance too expensive for managements and employees to bear.
We need a comprehensive Act to set out high minimum standards for prevention of accidents and disease arising from work. We need a greatly expanded enforcement body which will seek out deficiencies, provide advice for raising standards and ensure that the advice is speedily and effectively accepted by employers. We need to elevate the importance of health and safety at work by devoting more resources to safety education, accident prevention and above all, the creation of a real occupational health service. We need to remove the complacency which insurance cover encourages without diminishing the compensation to victims.
We must extend the list of industrial diseases to make them relevant to the changes in technology and materials which have brought the dangers, and give the system of certifying industrial diseases a new justice which it has never had in the past. While we cannot dramatically change deep and long-held attitudes to

safety and health at work—no law can change attitudes as deeply-based as that —we have a responsibility for setting uncompromising standards and seeing that they are effectively enforced.
Lord Robens said:
The primary responsibility for doing something about the present levels of occupational accidents and disease lies with those who create the risks and those who work with them.
The plain fact is that we have a problem involving a thousand deaths and half a million accidents a year. We have the problem of diseases which kill people 20 years after they have been forced to stop work because either those who create the hazards or those who work with them have not done and are not doing enough. It is time that Parliament acted. We must set new standards of vigilance. We must ensure that such standards are met by industry. Only then will we begin to see a true reduction in the terrible tragedies that occur because people go to work.

5.02 p.m.

The Under-Secretary of State for Employment (Mr. Dudley Smith): The hon. Member for Bedwellty (Mr. Kinnock) has put his time to good use by choosing this subject. He began by reminding the House that every year approximately 1,000 people are killed at their work, that half a million people suffer injuries of various degrees of severity and that 23 million working days are lost annually on account of industrial injury and disease.
The hon. Gentleman rightly took his text from the first paragraph of the first chapter of the Robens Report. That is a salutary paragraph. The Committee of Inquiry on Safety and Health at Work was right in beginning its work and its report by reminding the nation of this problem. It is a problem which has been with us a long time and which will still remain whatever we do as a Parliament and as a nation. The hon. Gentleman said, rightly, that this is a human problem. In terms of misery and suffering, about which we all know, great tragedies have evolved.
I shall try to put the matter in perspective at the outset. I do so with no spirit of complacency. In fact, Great Britain has a better record than most other industrial countries, particularly advanced industrial countries. It has been


improving considerably. However, as Lord Robens reminded us, a plateau was reached. It was then time for new initiative to be shown. That was recognised before the committee was set up and the report was produced. The report provides the new initiative which so many hon. Members wish to see.
I am taking the fairly unusual course of speaking early in this debate. I do so not out of any discourtesy to hon. Members in not listening to what they have to say but because it would be discourteous not to make the important announcement which I am to make fairly early in our proceedings. Hon. Members will be enabled to judge what I have said and perhaps to refer in their speeches to what I have said.
The House will remember that the Robens Report was published last July. There has been no reluctance whatever on the Government's part to come to a decision. The hon. Member for Bedwellty probably appreciates that there has been a great deal of consultation. Such consultation was needed and it was right and essential to get the right decisions. In the Government's view, wrong decisions can be made if a Government hurry too quickly.
I am now able to say, whilst reminding the House that my right hon. Friend the Secretary of State for Employment made a statement welcoming the Robens Report and expressing the Government's firm intention of taking action to achieve the report's broad objectives, that we have sought and carefully considered reactions to the report from the CBI, the TUC, local authority associations, professional organisations and a wide range of interested bodies.

Mr. Harold Walker: Everybody but the House of Commons.

Mr. Smith: I have heard many expressions of opinion on this subject at Question Time and many hon. Members have made their views known. We are now debating the issue. We also consulted the staff of the various inspectorates. That is rather important.
The report's central recommendations have been widely welcomed as providing a suitable framework and a real impetus for forward movement in an area which concerns the well-being of literally mil-

lions of people. Many of the findings and recommendations of the report were directed to industry. There has been a great deal of discussion by employers' organisations, trade unions and other bodies about ways and means of following up the reports' recommendations. At the same time the Government have been examining the implications of the reports' recommendations which concern Government action.
The reports' main recommendations for Government action were these. First, it recommended that the present piecemeal collection of statutes and regulations concerned with safeguarding those at work, and the public, from risks arising from work activities should be unified within a new safety and health Act. Secondly, the report recommended that there should be a single organisation at national level to revise, administer and enforce the regulations and to provide a centre of authoritative advice on these matters. I am glad to announce, after examining the committee's proposals carefully, that early legislation will be introduced to implement the reports' main recommendations. I believe that decision will be widely supported.

Mr. T. H. H. Skeet: I understand that my hon. Friend is making his speech now and, therefore, has not listened to any arguments from the Government and Opposition benches except the arguments put forward by the hon. Member for Bedwellty (Mr. Kinnock). I understand that my hon. Friend will accept a unified inspectorate. There are serious arguments why the argument for unification should not be accepted. There are reasons for one or two of the inspectors to be included and for others to be left outside because of the expertise involved. Will my hon. Friend clarify his views?

Mr. Smith: My hon. Friend anticipates me. I am coming to that point in a moment. There are those who hold different views and I hope that my hon. Friend will make his point in due course. I am coming to the issue of unification.

Mr. Harold Walker: The Under-Secretary of State might ask his hon. Friend the Member for Bedford (Mr. Skeet) how he knows what is in the Minister's statement. Perhaps we might all have the


benefit of a preview of what the Minister will put to the House.

Mr. Smith: The hon. Gentleman is getting very excited over nothing. No one has had a copy of the statement except the right hon. Member for East Ham, North (Mr. Prentice), to whom I gave a copy out of courtesy an hour before the debate started. I do not know whether the right hon. Member has shown his hon. Friend the Member for Doncaster (Mr. Harold Walker) a copy of the statement. I can assure the hon. Member that I have not shown the statement to any Government back-bencher.

Mr. Rose: rose—

Mr. Smith: Time is short and many hon. Members wish to speak. Perhaps the hon. Member will allow me to continue. I wish to make my announcement. If I do not do so, hon. Members will be anticipating the points which I wish to make and the main elements of the legislation.
I have explained that we accept the main recommendations of the Robens Report and that we propose legislation. The Bill which we shall introduce will set out the basic obligations of employers, workers and others concerned with the prevention of accidents and ill health at work. Secondly, it will provide for integrating the present complex body of statutory provisions contained in various Acts under a single and comprehensive safety and health Act. That Act will do more than bring together existing provisions. It will extend protection to virtually everyone at work. It will also, and very importantly, provide for the prevention of dangers to the public near industrial operations.
Within this framework we shall be able to develop an integrated body of safety and health law which will, wherever appropriate, apply a common set of standards across the board. Above all, it will be more readily accessible and understandable by those affected by it.
Thirdly, the Robens Report made proposals for a new safety and health authority. The Government agree that there should be an independent statutory authority in this sector, and the legislation will establish it. A suitable structure for the new authority could be broadly on the lines of the Manpower Services Com-

mission and its agencies, which are to be established under the Employment and Training Bill which we shall be discussing in the House later this week. On that pattern, we would establish an organisation comprising a safety and health commission, which would be responsible for an operational agency—a safety and health executive.
The commission would be responsible to Ministers and, through them, to Parliament. It would develop a comprehensive strategy for promoting safety and health at work. It would provide advice to the Government and industry on all aspects of safety and health at work. It would propose to Ministers new regulations—for example, concerning the control of dangerous substances—where it considers them necessary.
Under that form of organisation, the safety and health executive would act as the commission's operational arm. To it will be transferred the headquarters and the field organisations of various Government inspectorates concerned with safety and health at work. That answers the point put by my hon. Friend the Member for Bedford (Mr. Skeet). These will include the factories, explosives, mines and quarries, alkali and nuclear installations inspectorates and certain smaller inspectorates.
These will, as Robens recommended, provide a unified advisory and enforcement service. I emphasise that there is no question of breaking up the specialist inspection teams which deal with particular problems of the industries with which they are concerned, but their unification will enable a full range of shared experience to be brought to bear on the problems which arise. With this there will be provision for ensuring that the necessary laboratory facilities are available and that an adequate research programme is maintained.
The new organisation will be generally responsible to the Secretary of State for Employment, but in certain cases we intend that the power to make regulations affecting particular sectors should be exercised jointly by the Secretary of State for Employment and the other Ministers concerned. This will apply in the case of regulations concerning the mining industry and education and health establishments. In the administration of


the Alkali Acts it will report directly to the Secretaries of State for Environment, Wales and Scotland to ensure co-ordination with other matters affecting the general environmental Departments. In a similar way, it will report to the Secretary of State for Trade and Industry on the licensing of nuclear installations.
Special arrangements will be made for agriculture. The agriculture Ministers will retain their present responsibility for safety on farms and for agricultural inspectorates. But the new body will be responsible for preparing regulations of a general character affecting farms as well as other places, and there will be special arrangements for liaison between it and the agriculture Departments.
The new organisation we intend to establish will constitute at national level a single and major centre of initiative for positive action to improve safety, health and physical working conditions. It will have an important educational rôle in raising the general level of awareness of safety and health problems and the means of tackling them.
While its educational and advisory rôle will be very important, it will also have power to take swift and effective measures where necessary to deal with backsliders. The hon. Gentleman referred to this at some length. I can fully answer him by saying that the new body will be able to use the new improvement notice procedure recommended by Robens to secure rapid remedial action where things are not as they should be. In serious cases, it will be able to issue immediate prohibition notices halting operations. It will be able to prosecute offenders and we are seeking to provide much stiffer penalties for breaches of safety and health regulations.

Mr. Kinnock: Hear, hear.

Mr. Smith: I am glad that I carry the hon. Gentleman with me, because I stress that there is no question of downgrading penalties and ultimate sanctions which can be available to deal with those who are wrong-doers in this sector.
An essential feature of the new organisation will be that the interests of management, workers and others concerned will be reflected in the composition of its management. Robens stressed the

need for such direct participation in the making and implementing of more effective safety and health standards if industry is to play its part effectively. We believe this to be of the utmost importance, and the legislation will be a continuation of the measures we are already taking in the Manpower Commission for involving management, workers and local authorities in the formulation of policies and in the management services which carry out those policies.
Special mention needs to be made of the rôle of the local authorities, which already have extensive and important functions in this matter. Generally, these functions will be little changed. But we intend to provide for closer working relationships between the local authorities and the new central organisation in a way which will enable the local authorities to make an even more effective contribution in future than they do at the present time. Similarly we aim to ensure close working relationships between the new organisation and the National Health Service.
The reorganisation involved will, of course, be looked at with a very personal interest by the Government staffs who will be affected. I stress that there will be the fullest consultation with the organisations representing the staffs about the implications of what is proposed.

Mr. Ernie Money: Before my hon. Friend leaves the subject of remedial action, can he assure me that the recommendations in paragraphs 75 and 76 of the Robens Report, dealing with the need for the amending or the updating of the Companies Acts so that registered companies would be required to provide prescribed information about accidents and industrial diseases suffered by their employees, will not be forgotten?

Mr. Smith: We take the point that, in relation to annual reports, firms should make not only employees but everyone else aware of their safety standards. That point is being taken into account.
I was assuring the House that there will be the fullest consultation with the organisations representing the staffs affected in this reorganisation on the implications for them of what is being proposed. The reorganisation will open up for the staffs a new dimension of career


interest, of challenge and of job satisfaction.
We now intend to press ahead with discussing our plans for legislation in more detail with the CBI, the TUC and others specifically interested. What we are aiming at is a radical reshaping of this country's arrangements for promoting safety and health at work. I believe that the Robens Report, which may well prove to be one of the great social documents of our time—let us not undervalue it—has provided occasion and impetus for a major advance. We shall need the co-operation of industry, the local authorities and others in getting the details of our legislation property worked out speedily but, whatever detailed points of difference may arise, I am confident that we shall have the good will of both sides of industry. I hope that we shall also get it from Parliament in what we are seeking to do.

Mr. Edwin Wainwright: Does the hon. Gentleman realise that he is creating the impression in the House that the main inspiration of the Government is to wait until accidents have occurred and then send an inspector to make recommendations? It is the prevention of accidents that we want rather than inspections after they have occurred.

Mr. Smith: I often agree with what the hon. Gentleman says, but in this case he totally misunderstands the concept of the Robens Report. The accent will be on prevention rather than on specific cure at one particular time. I recommend to the hon. Gentleman that he should read the report in detail. He will find that by a system of better education, by self-regulation with a strong back-up, one will be preventing extra accidents from occurring, and that consequentially the safety record, once this gets off the ground, will be far superior.
The hon. Member for Bedwellty talked about the need for audacity and imagination to be shown. That is what we are getting in this report. The hon. Member does not agree with the accent which has been placed on self-regulation. But this is an imaginative report. Many people are misunderstanding its concepts because they are overlooking the strength of the back-up procedures over the notices to which I have referred, which are an extension of control, which we do not

have at present, and are much more flexible than what we have at present. Ultimately they will provide heavier penalties than the present penalties for those who do not conform.
We must get the right concept in our minds, so I commend to the House a reading of paragraph 28 of the report. I shall not weary the House with the whole paragraph, but quote merely a short piece, which says:
People are heavily conditioned to think of safety and health at work as in the first and most important instance a matter of detailed rules imposed by external agencies. We have encountered this instinctive reaction many times during the course of our Inquiry. It was reflected, for example, in the attitude of those who argued that standards would be improved if workplaces were visited more frequently by inspectors. Given the hundreds of thousands of workplaces in the country, this approach is manifestly impracticable. The matter goes deeper. We suggested at the outset that apathy is the greatest single contributing factor to accidents at work. This attitude will not be cured so long as people are encouraged to think that safety and health at work can be ensured by an ever-expanding body of legal regulations enforced by an ever-increasing army of inspectors.
If anyone has any doubt—I am sorry to see that this is sometimes manifested by Opposition Members—the end of the chapter states:
Yet we suspect that the greatest obstacle will be not so much the intrinsic complexities of the subject as the fact that many of the arrangements under review are long established. In the words of Bagehot, 'One of the greatest pains to human nature is the pain of a new idea'.
In moving this important motion, the hon. Member welcomed many of the Robens provisions, but he rather downgraded them because he said that among those provisions there were some which were routine. But they are part and parcel of this concept. They will be fulfilling the aims and objects behind the thinking of the Robens Report. When the hon. Member talks about the grievous deficiencies, again he has overlooked the fact that behind the idea of self-regulation and the greater involvement of work-people and managements is the back-up of a quite stringent sanction for those who do not comply.

Mr. Kinnock: I regret that the Minister has misinterpreted what I said. I did not say that I wanted quite stringent sanctions. I said that I thought the demand was for unity of action. That is


missing in the report, and paragraph 28 is a trite over-simplication of the problem. That was why I called it a "facile axiom", in a memorable phrase. The fact is that the Minister, inside the framework that he has just described, can prove to us that the Government intend to do something imaginative, important and effective about provision for safety and health at work only if he tells us that those inspectors who have new and acceptable responsibilities under the legislation to be proposed will multiply fourfold or fivefold so that they can do the job of issuing improvements notices and prohibitions effectively. If we do not have 5,000 or 6,000 of them, the inspectors simply will not be doing the job, and we shall have the status quo.

Mr. Smith: I was about to deal with that point, but as time was getting on, and a number of hon. Members wish to speak, I thought that hon. Members would be getting restless.
The commission will be able to put to Ministers the case for more staff when it starts its programme of work. The bringing together of the main inspectorates and their support staff under unified management should give scope for more efficient deployment and use of inspectors. Over the last 10 years, the number of factory inspectors has increased over 50 per cent. The increases are good and they are in the right direction. We shall never satisfy every hon. Member in the number we add, but the important ethos here is the application of these people, ensuring that they are not wasted. One of the best parts of Robens is the suggestion, particularly concerning factory inspectors, of a new accent towards their work and greater selectivity in dealing with areas which need constant attention because of major exposure rather than the routine round of inspections that we have had in the past.
The hon. Member for Bedwellty talked about a kind of fatalism about industrial accidents and said that many people say that these are bound to take place and that people must accept them. I agree that this fatalism exists, but surely the course which the hon. Member and some of his hon. Friends are advocating will encourage the continuance of that fatalism. We want to jerk people out of the idea of this fatalism. In the Robens concept we have this chance—it will not

be achieved easily—of getting people better educated concerning safety and of extending their responsibilities, on both sides of industry, and having a more unified and creative force, which will have its impact on the situation.
Therefore, these are matters which require more than just superficial consideration. They need deep study and understanding on the part of hon. Members interested in this particular matter. I certainly accept without reservation the motion before the House, but I cannot accept many of the strictures which the hon. Member has put upon us. This is a great opportunity and we should be very foolish if we ignored the chance of seizing it.

5.27 p.m.

Mr. Reg Prentice: The Under-Secretary has told the House that this subject needs more than superficial consideration.

Mr. David Madel: It needs a full debate.

Mr. Prentice: We need a very full debate. We have had a very unusual procedure this afternoon. The Under-Secretary has used the opportunity presented by the motion to make a statement of great importance. As he has done that, I hope he will consider it appropriate that I should follow that up.
This means that the normal pattern of this debate is disarranged. The debate is too short anyway. We should have had by now, during this Session, a full day's debate on the Robens Report. But, having now had the Government's statement, it is imperative that we have a full day's debate between now and the Summer Recess. Although the Under-Secretary will say that this is a matter for his right hon. Friend the Leader of the House and so on, we shall be following this matter up through the usual channels and, if necessary, from the Dispatch Box, to demand a full debate on this vital subject.
I congratulate my hon. Friend the Member for Bedwellty (Mr. Kinnock) on his choice of subject, for giving us the first opportunity to debate the Robens Report, 10 months after publication. I congratulate him on the very powerful speech he made. Surely the challenge that he has posed to us is this: how far


do our actions measure up to the gravity of this situation, to the concern which we all express on these occasions? The concern which we express, and which the public express, is too often selective and spasmodic. We react, certainly, to a situation such as the Lofthouse Colliery disaster, or to something new, unexpected and frightening, such as the lead poisoning outbreak at Avonmouth. But too often we ignore the long, steady toll of industrial casualties, which I quote for the third time, without apology, as approximately 1,000 killed and 500,000 injured every year.
The real question is: how far do the proposals before us measure up to the challenge posed by these terrible figures? On balance, the Robens Report does not measure up to this. Neither does the Government's statement today.
I should like to mention—almost in terms of headings—what I welcome in the Robens Report and the Government's statement.
When the Under-Secretary of State said that the Robens Report was a great social document he was right in the sense that it contains a great deal that is of permanent value. At least part of it contains valuable new thinking which we should welcome. That the Government propose to legislate soon is to be welcomed so far as it goes.
There are four aspects of the matter which I should like to emphasise. First of all, there is the concept that the legal cover should be extended to all workers, including the self-employed, and indeed members of the general public who may be put at risk as a result of industrial processes. This is an important and long overdue advance in contrast to the piecemeal approach of the nine major statutes which are now in force.
Secondly, it is right to unify the statutes in one new major piece of legislation in the form of an enabling Act and regulations made under it. There is a need to codify and clarify the law but not to reduce the law's impact. That is a matter to which I shall return a little later in my remarks.
Thirdly, we all welcome the concept of the new authority, the safety and health authority which the hon. Gentleman announced a short time ago, and the unification of the inspectorate under

its auspices. We shall need to look closer at some of the details. What the Minister said appeared to be a little different from what Robens said about the extent to which the inspectorates will be amalgamated. We shall need further opportunities to debate this and other matters in greater detail.
I mention a fourth matter which is long overdue; namely, that there should be through the new procedure a means by which regulations can be made quickly in view of new dangers which are constantly occurring in industry. I refer to the dangers created by new substances which are being used by industry, which create risks of which people possibly are not aware and in relation to which there is need for a streamlined procedure.
Many other valuable proposals in the Robens Report were not mentioned in the Under-Secretary's statement. For example, I hope that there will be legislation on the lines suggested by Robens on the design of new machinery which by law would have to conform to certain safety standards. This is an important point. Another significant point relates to the requirements on noise control, which is a tremendously important subject in terms of the health of large numbers of workers. In terms of both the hon. Gentleman's statement and other parts of Robens which he did not cover there is a great deal which we want to see carried through.
This leaves us with at least three main criticisms, all of which are interrelated. The first criticism is that the whole Robens message is too permissive and appears to suggest that there should be less reliance on the statutes than there has been in the past. The second criticism is that there is no provision either in Robens or in the Government's statement for compulsory safety representatives or compulsory safety committees. Thirdly, there is nothing in the Robens Report or in the Government statement about the need for a much larger Factory Inspectorate. I shall expand on those three points.
On the question of reliance on voluntary support, I shall not repeat the arguments which were put so powerfully by my hon. Friend the Member for Bedwellty. I am sure that my hon. Friend was right. The Minister said that there


had been much misunderstanding about the concept, and this may well be true because the language of Robens is ambiguous. Since the report appeared I have discussed the matter with a great many people, including members of the Robens Committee, and I have discovered that no two people agree on precisely what the report means on certain points, but it clearly indicates the committee's view that to some extent there should be less law in the future than there is at present.
I cannot do better than quote the leading article in The Guardian which appeared on 20th July 1972 in reaction to the Robens Report:
Its main fault is in the thickness of the velvet it has chosen to cover the iron hand of the law. It proposes that the new law should swing the emphasis from statutory to voluntary compliance. A change is needed, but the committee puts too much faith in human nature.
Later it said
It opens up too many loopholes by its vagueness. If employers were really so ready for self-regulation, four workers would not be killed at work each day.
I am sure that that is true. That is not to contradict the valuable concept in Robens that there should be more self-regulation. But should the self-regulation replace the law or be additional to it?
I am sure it is right to say that more initial responsibility needs to be taken by people at work and also by management. The report is right to say that every company should have a declared policy on safety and health, that it should consult its workers, and that a company's annual report should set out the record of accidents and disease and measures taken by the company to deal with the situation. The committee was also right to say that there should be codes of practice. But this should be not a substitute for legal enforcement but additional to it. We need both and the workers deserve to have more of both.
The country still faces a dilemma which the hon. Gentleman in his statement did nothing to answer. We do not know the Government's thinking on the extent to which the scope of the new statute will cover the ground of existing statutes. One principle upon which all Opposition Members will insist—and we hope that

we shall be joined by hon. Members opposite—is that in future no worker should have any less statutory protection than he already has. In fact, we want to improve the protection, not reduce it.
The second main criticism relates to safety representatives and safety committees. It is worth reminding ourselves that when the Labour Government appointed the Robens Committee they had already made a decision to legislate for compulsory safety representatives and compulsory safety committees. That decision was then taken and legislation was introduced to the House. The other half of that legislation, dealing with the employment medical service, has been carried through under the present Government. The half which I have mentioned has been brought back to the House in successive Private Members' Bills during each Session. Last Session the Bill went through most of its stages and was not opposed by the Government. Last week my hon. Friend the Member for Dearne Valley (Mr. Edwin Wainwright) introduced a Bill on those lines under the Ten Minutes Rule. I shall not repeat all the arguments, but I emphasise that it is high time that a political decision was made by the Government to carry out the will of the House and to legislate accordingly.

Mr. Dudley Smith: The right hon. Gentleman will know that the Government did not oppose the legislation he mentioned because we were waiting for Robens, and at the time we were chided about it. Robens did not report in favour of that type of statutory committee but recommended statutory involvement of workers and management and for them to work out what they found to be the best system for the right type of consultation. That shows a greater flexibility than to have one rigid pattern imposed on industry.

Mr. Prentice: The difficulty about that concept—and the hon. Gentleman anticipates my other point—is that Robens said that there should be a general statutory obligation to consult. That is much too weak without laying down any more detail, and it will not measure up to what is needed in terms of the reality of British industry. There was no need to wait for Robens, because the decision had already been made by the Labour


Government, and when the matter was recently brought before the House it was not opposed on the Conservative benches. This is a matter on which this Parliament should go ahead without worrying about whether Robens said something or not. The whole point of our case is that the Robens Report contains much of great value but does not totally measure up to what is needed. Therefore, we have to identify the matters on which action is required.

Mr. Sydney Bidwell: My hon. Friend referred to the necessity for compulsory safety committees. On the assumption that workers and management should combine in a full consciousness of safety matters, does my right hon. Friend not agree that such a concept would not militate against anything in the Robens Report but that, on the contrary, it would act as a valuable adjunct to it? Does he not also agree that the Government would not suffer any loss of face if they addressed their minds to taking this enormous step forward?

Mr. Prentice: I am sure my hon. Friend is right. The Robens Report has a number of very sensible comments to make about the need for managements and unions to become more involved in promoting safety at work. This proposal for compulsory safety committees will act as a vehicle for that action. It will stimulate managements and unions to think about what is happening at work places and to bring forward ideas. Without the committees, this will remain merely an exhortation in a report which no one will have read, and, therefore, no action will be taken on it.
My third main criticism concerns the size of the Factory Inspectorate. Whatever progress is made towards better self-regulation, the fact remains that in large parts of British industry there is no substitute for enforcement based on regular inspection. One part of the problem is the need for stiffer penalties, and I welcome what the Under-Secretary said about increasing the penalties for breaches of the law. But there should have been some reference in his statement—and I hope that there will be Government reaction to it—about a further considerable expansion of the Factory Inspectorate. It has been consistently too low under successive Governments. In 1928 the In-

ternational Labour Organisation went on record as saying that every place of work subject to legislation of this sort should be inspected at least once a year. We have fallen consistently well below even that modest standard. My advice is that in recent years it has been of the order of once every four years.
The shortage of inspectors poses a dilemma which is discussed in the report of the Chief Inspector. In the early part of his report he says that it has been decided to change the priorities of the work of the inspectorate, and that, instead of going for a cyclical approach, by which occasional visits are made to virtually all premises, it will go for inspection in depth at premises where there is a special risk.
Given the scarcity of inspectors in relation to the size of the problem, this may be a wise decision. But what are its implications for other premises? In the cautious language of an official report it is said:
But the Inspectorate has by no means abandoned surprise visits.
I hope not. However, it is clear that there will be very few of them.
Nevertheless the need to ensure that no premises go wholly without inspection will be kept in mind.
But he poses the dilemma, speaking of the Factories Act alone, that there are only 638 inspectors to deal with 198,000 factories. That is a dilemma which he should not have to face. It should be, and must be, possible to have a cyclical system of visits, including surprise visits, plus inspection in depth along the lines discussed in his report and along the lines suggested in the Robens Report.
We welcome the statement that there will be early legislation. We want a full debate this summer, if possible before the legislation is drafted in its final form, so that we may examine these matters in more detail and give further study to today's statement. Meanwhile we urge that a complete strategy on this system should include both the better parts of the Robens Report and the points which have been made from these benches about the need for legal protection to be at the forefront of our thinking, about the need for compulsory safety representatives and committees and about the need for a larger Factory Inspectorate.
Only by a strategy embracing all these matters will this country make the progress that we all want to see in reducing the human suffering which arises from the unacceptable level of industrial accidents and disease.

5.45 p.m.

Mr. David Madel: We are all grateful to the hon. Member for Bedwellty (Mr. Kinnock) for initiating this debate. Unfortunately, we shall have to revise our speeches somewhat in view of the fact that my hon. Friend the Under-Secretary intervened earlier than we had expected.
I am glad that we have this opportunity to discuss the motion because it gives us the chance not only to comment on the Robens Report but to discuss conditions of work which were not dealt with in detail by the Robens Committee because it felt that these matters either were beyond it or were outside the scope of its inquiry.
Much has been said, and rightly, about the appalling accidents that we have in industry, the number of people seriously injured in a year and the need to remove the apathy that exists in many companies on attitudes to safety. Paragraph 13 of the Robens Report has been widely quoted. It says that unless apathy is removed both by managements and employees, we shall not be able to reverse this very bad trend in accidents.
Another important point touched upon only lightly is the fact that between 5 million and 7 million people in this country are net covered by any safety regulations at their places of work and that steps must be taken quickly to bring them into the new safety rules.
My hon. Friend the Under-Secretary went through his speech so rapidly that I did not quite take all of it in and was not able fully to adjust my speech in the time available to me. But I wanted to make two points which my hon. Friend may or may not have touched upon. The first concerns the new area offices of authority which will co-ordinate the work of the local authorities in administering the new law. We must hear more about what extra action the new local authorities are expected to take. The right hon. Member for East Ham, North (Mr.

Prentice) suggested a full debate on the Robens Report. Certainly we want a fuller statement about what the new local authorities are to do to carry out the new law on safety and health at work.
Secondly, the Robens Report says that every firm should have a written policy for health and safety of which every employee should have a copy, and that there should be an annual report of what the firm has done in the past year and what it intends to do in the next year to improve safety and to take preventive action against accidents which have occurred.
I assume from what my hon. Friend said that the Health and Safety Committee will be discussing that report in detail and that that recommendation of the Robens Report saying that every firm should have a written policy will be endorsed. I did not pick up whether my hon. Friend said that that would be incorporated in the new legislation.
Then we had a brief reference to the noise problem. It is amazing how the eeffct of noise on people is issued as a big argument when certain areas resist a new airport. But not enough attention is paid to the noise factor at work. The Robens Report says that the cost and competition factors probably would deter many firms from obeying an authoritative code of practice as opposed to a new law on noise. The hon. Member for Bedwellty pointed out that more than half a million people suffer from the effect of noise at work and that the figure is rising considerably.
We have to put teeth into the legislation. We have to have a new law on this. The Robens Report says that a code of practice must be underpinned by legislation. I assume that the report on noise of the Industrial Health Advisory Committee in 1971 and its suggested code of practice will be put into law. If my hon. Friend the Under-Secretary has an opportunity to reply to the debate, I hope that he will comment on this. Alternatively, if and when we have a fuller debate perhaps more will be said about it then.
I want now to refer to mental health problems at work. The Robens Report does not go into this subject in great detail although its chapter on noise is an indirect look into the matter. Recently there has been a conference on stress


work convened by the National Institute of Industrial Psychology, and one of its speakers was a Dr. R. B. Buzzard. First, he refers to the whole question of long hours at work and says that unless we look at their effect we shall not be able to improve the mental health of people at work. He refers back to 1915
with the investigations of the Health of Munition Workers Committee appointed by the Government of the day to discover why the production of munitions was declining despite steadily increasing hours of work. The Committee showed that the long hours were causing the decline because of mounting fatigue and insufficient leisure for recuperation. It also began to show the further ill effects on productivity of temperatures too hot or cold, bad lighting and inadequate nutrition and showed they took effect within limits much narrower than had previously been thought.
That shows that there is a need for a change of attitude to hours worked.
Do companies know how many hours their employees work? Here, again, I should like to quote from the lecture by Dr. Buzzard. He said that the National Institute of Industrial Psychology is
often asked by companies whether an absence percentage is too high; yet, when we ask in turn how much overtime they work are told: 'Probably two hours a day'. This is the equivalent of more than a day a week; that company's absence cannot be compared with another's where no overtime is worked.
I feel that we know far too little about overtime and the effects of long hours at work. We should know considerably more.
An obvious example of monotonous work is the car industry. Much has been written about experiments in Sweden at the Saab works and another that is coming in the Volvo works. When it is suggested that the mass assembly line method should be changed and people are asked to look into the Swedish practice, they ask "What will be the cost?"
In an article in the Financial Times of 12th March this year Mr. James Ensor writes:
The question that the world motor industry is asking, of course, concerns the economics. They have proved surprisingly good. The total assembly time is the same as in a conventional plant and Saab estimates that its labour costs are only £3,000 a year higher—the equivalent of one extra employee".
The Volvo company is to bring in a new method of production at its plant in Kalmar.
The Kalmar plant will cost £9 million, about £1 million more than a conventional

one. But Volvo, which has recorded an annual labour turnover rate as high as 50 per cent. in the past two years, feels that this is a small price to pay.
For many years we have been gearing ourselves to increased mass production and higher growth rates. But we must now do it without mass disaffection. This is a problem on which the Government, employers and unions will have to act. It is a problem which is not gone into in great detail in the Robens Report.
I should like to make two points for consideration by any committee that may be set up to look into this matter. First, long hours often defeat their objective by reducing productivity and net production. Secondly, absence and labour turnover at work will increase if the journey to work is complex and long.
I have spoken for only a few minutes because many hon. Members wish to speak.
The big gap in the Robens Report is the absence of any great detail on mental health at work. However, it might have felt that that subject was not within its sphere. Unless we look into the problem of boredom, long hours and overtime at work, we shall have mass disaffection at work, and, therefore, the object of increased productivity and higher growth rates will be defeated because we did not pay sufficient attention to the nature of the environment at work.

5.54 p.m.

Mr. Jeremy Thorpe: I find the whole format of the debate profoundly unsatisfactory. I in no way detract from the gratitude I feel towards the hon. Member for Bedwellty (Mr. Kinnock) for raising this issue. I congratulate him on his good luck in the ballot and thank him for the extremely lucid, cogent and valuable way that he opened the debate.
Every speaker in the debate has underlined the tremendous importance of this subject. Statistics have already been given three times, so I will not repeat them, save to remark that in economic terms industrial accidents account for about £200 million loss and in human terms the effects are unquantifiable.
It is extraordinary that a debate on this subject should be left to the luck of back benchers in the ballot. It should


have been in Government time, or, if that was not forthcoming, in Opposition Supply time. The same is true in another place where again the initiative was left to a back bencher, my noble friend Lord Avebury.
That is not all. We had the extraordinary situation of the Minister, who I am sure wanted to be helpful, telling us roughly what is to be in a Bill, so that we might have a kind of bastard Second Reading debate without knowing exactly what is in the Bill. This is an appalling way to proceed. I hope that it will not happen again, because it is inconvenient for hon. Members on both sides of the House.
I suggest that the Minister should have made a statement instead of an advance of the speech being given out to the right hon. Member for East Ham, North (Mr. Prentice), who had to rummage through it to find the salient points. A statement should have been made, as in the normal course, with advance copies given to those who usually receive them and followed by question and answer. That should have been followed by a White Paper and a debate or, failing that, by the laying of a Bill with formal First Reading and then a Second Reading debate.
But what happened? The hon. Member for Bedwellty opened the debate. The Minister then told us roughly what is to be in a Bill. We want to know the details of the Bill to decide whether they are adequate, but we do not have those details.
On 30th January in another place Lord Gowrie, winding up the debate, said that it was clear that the debate was the last stage of the Government's consultation, that they were making up their minds, and that the Secretary of State for Employment would be making a statement. That has not happened. That, in my view, is what should have been done.

Mr. Dudley Smith: I appreciate the point made by the right hon. Gentleman. I take no pleasure in having to conduct the debate in this form. However, I am sure he will agree that a statement was imminent and would have been made shortly. That was pre-empted by the hon. Member for Bedwellty (Mr. Kinnock) winning the ballot and putting down

this motion. I make no complaint about that. However, it would have been gravely discourteous to him to answer the debate and to make a statement on the following day. It would also have been discourteous to the House if I had just sat back, listened to agitation from hon. Members on both sides of the House about Robens being implemented, and then glibly, at the end of the debate, said that we were to do that. Either way there are disadvantages. I was trying to be helpful by spelling out what the Government intend to do.

Mr. Thorpe: No one would wish the hon. Gentleman to sit there pregnant with ideas but constipated about giving us any indication of what was intended. But the hon. Member for Bedwellty won the ballot three weeks ago and the Government had the Robens Report nearly a year ago. If on this vital issue the Government to have a debate in another place were able as far back as January. I should have thought that this House might attempt to keep up with the speed of their Lordships' House. I hope this will not happen again.
We do not know when the Bill is to be introduced. Is it to be introduced this Session or the next? Is there to be a definitive debate before the terms are published, or will the next stage be the presentation of the Bill and then a Second Reading debate? We are entitled to know. I hope that we shall be told more about the Bill if time permits.
I shall be very brief. I welcome the fact that the basic obligations that an employer owes to his employee will be given statutory effect. However, we want to see how detailed they are before we can ascertain whether they cover the situation. It is a great thing that at last we shall have an integrated body of statute law rather than a plethora of statutory instruments. This will be a good thing, but we shall not know the details until we see the Bill. It is right to have a Commission on Safety and Health at work and right that the various inspectorates are to be brought together, each maintaining their own specific expertise but with certain common standards throughout. This could be a good thing.
I should like to re-echo what was said in another place by my noble Friend


Lord Avebury, that the effect of Robens should be to bring forth in legislative terms a revolution in the safety conditions of workers in industry as great as any since the first action was taken in 1833.
The hon. Gentleman the Member for Bedwellty mentioned the reference of Robens to apathy. He said that he felt that Robens—I think I quote him correctly—over-estimated the effects of apathy, and he went on to say that we still need statutory action. With that I wholly agree. But in the second part of that paragraph Robens said:
The primary responsibility for doing something about the present level of occupational accidents and disease lies with those who create the risks and those who work with them.
I interpret that to mean that those who work with the risks must be very much more intolerant of the risks to which they are subjected, and that those who create the risks must know them and have a much greater responsibility and suffer far greater penalties if they allow them to continue. That is how I interpret Robens. Whether he wished that interpretation I do not know. It seems to me that there must be a far greater social responsibility on one side and a far greater awareness of the dangers on the other.
If anyone really thinks that British industry can be left to laissez-faire, I think the evidence was contrariwise when it was necessary for the previous Government to bring in a redundancy Bill to prevent employers discharging with only a week's or a fortnight's salary men who might have worked for 40 years. Anyone who believes that standards of this sort relating to industrial injuries, pollution and various standards of merchandise can be left to self-will is, I believe, flying in the teeth of the facts.
The hon. Gentleman the Member for Bedfordshire, South (Mr. Madel) mentioned the fact that there are 5 million to 6 million workers not covered by safety regulations, and I shall be interested to see whether they are covered under this Bill. The Minister, replying to the hon. Member for Bedwellty mentioned the position of agricultural workers and said that they would be covered. That is a great advance, because these workers are dealing with highly technical machinery, some of it extremely dangerous. There has been some legislation

with regard to cabs fitted on tractors, and so on, but one wants to know the extent to which there is overall protection.
I think it is right that there should be in the annual report information about safety conditions and the care taken. I believe that we shall never have enough inspectors to carry out as many unheralded visits and inspections as would be desirable. I would like to see, in addition to company safety officers, elected worker representatives dealing specifically with safety, who would be part of works councils. That is another thing works councils could do. I would like to see them making unheralded safety audits throughout the industries in which they are employed.
Therefore, I think there is enormous scope for internal policing, and this is something to which the trade unions have an enormous contribution to make, and they are entitled to this, with this appalling record. The hon. Gentleman said that he was not being complacent but it was a fact that our accident rate was lower than that of most other countries. He is perfectly correct; but it is also a fact that our Industrial Revolution started long before that of most of those countries. Therefore, we ought to know more about safety, the machinery we are creating and the sort of guards and protections we should provide. I should be very surprised if it were otherwise. But as long as there is a risk of any accidents in any factories we must continue to be aware.
One category which the Robens Report singled out was the transport workers. The minute they leave their place of work they are not covered by any sort of industrial protection, unlike other industrial workers.
We must see also that there is proper provision for new materials, some of which are highly toxic and some of which have qualities of which we are still unaware. We shall have to consider whether in this country we should not move into creating a disability income—a matter which my hon. Friend the Member for Cornwall, North (Mr. Pardoe) has canvassed—so that we get away from the ridiculous argument whether a man is suffering from an industrial disease or an industrial accident or merely from a disease or an


accident not connected with his employment. This would be an enormous improvement.
I hope we can say that this debate marks a new awareness in all quarters of the need to do something. I believe that the way in which the Government have announced — or half-announced — what they are proposing to do is definitely unsatisfactory. Therefore I hope that we shall have a full-scale debate before the House rises, with a White Paper setting out the proposals contained in the Bill, or indeed a Second Reading on the Bill itself.

6.5 p.m.

Mr. T. H. H. Skeet: I was grateful to the hon. Member for Bedwellty (Mr. Kinnock) for the skill with which he approached his subject, but I agree with the right hon. Member for Devon, North (Mr. Thorpe), particularly as regards the way in which this debate has been handled. It is most extraordinary and is my first experience of a Minister summing up without hearing a single representation by any hon. Member. It is quite possible that we may not even have an opportunity to put questions to him.
Like the right hon. Gentleman, I am in some doubt when the legislation is coming in. I am willing to give way if the Minister will tell me whether the Bill will come before the Companies Bill, which we are told will be placed before the House in the autumn. Or is the Companies Bill to come first? This has been held up for about a year, and I have tabled a number of Questions on the topic, which I now consider to be urgent. Is the Minister prepared to say now when the Bill will be placed before the House?

Mr. Dudley Smith: My hon. Friend knows perfectly well that I am not responsible for the priorities of Government legislation. It would be very wrong for me to assess the priority of this compared with any other Bill. I said in my statement that there would be early legislation, and it will probably be next Session. This Parliamentary Session is well advanced, and a major Bill of this sort obviously could not be treated in the way it should in this Session. However, I take note of what my hon. Friend

has said. I made a definitive statement on behalf of the Government, and when we say "early legislation" we mean early legislation.

Mr. Deputy Speaker (Miss Harvie Anderson): I hope hon. Gentlemen will recognise that there is approximately 50 minutes left for this debate and some six hon. Members who have been sitting here throughout the debate are anxious to speak.

Mr. Skeet: I am very much obliged to the Minister for his comments and to you, Mr. Deputy Speaker, for indicating that we are short of time. I will confine myself to the topic of the unified inspectorate which we are told is to come into being.
I am concerned about this because the Robens Report, dealing with it in paragraph 105, said:
We found some difficulty in forming a clear view about the third of our categories, which includes the Radioactive Substances Act 1960 and the Alkali etc. Works Regulation Act 1906
and a little further on:
they are concerned not with the safety and health of workpeople but with the need to control certain emissions from workplaces in the interests of public health and amenity.
It goes on at a later stage to recommend that they all go into the unified inspectorate.
To my way of thinking this would appear to be wrong. The Minister says that he does not want a whole army of inspectors, because this is no way of solving this problem. These bodies have built up considerable expertise over the years, particularly the Mines and Quarries Inspectorate—I must disclose a certain interest here in that I advise a trade association—the Nuclear Installation Inspectorate and the Alkali and Clean Air Inspectorate. These devote attention partly to what goes on in factories and partly to what happens outside: in the interest of the general public. If centralisation is imposed on them, in my opinion the result may be to sever the lines of communication to the head of their own department and the Secretary of State himself. In other words, this will be building up a large bureaucracy, and I very much doubt whether this system will work.
We have seen in the report a number of arguments to the effect that this would be a tidy arrangement, a pooling of talent, but surely there is no common denominator in the inspectorates involved. It is conceivable that what the Factory Inspectorate deals with is not the same as what the Mines and Quarries Inspectorate deals with, and where there is no chance of cross-fertilisation there can be no pooling of information to any useful purpose. It would therefore be better to leave things alone and allow these bodies to go on regulating their own areas, in which they have developed expertise and have made great strides in understanding recent technology.
I hope that the Minister will bear in mind the fact that the European Economic Community, which has referred to the general factory inspectors all industrial plant, is thinking of going in the opposite direction. It is now coming down to the establishment of independent inspectorates. It is a unique situation that we in the United Kingdom should be going for centralisation while the Common Market countries are proceeding from a centralised system to independent inspectorates. For the functions that I have mentioned, theirs seems to be the wiser course.
On the subject of the special expertise which has grown up, particularly in reference to the Alkali and Clean Air Inspectorate, dealing with sulphur dioxides and fluorides, which have been a problem in the past, the inspectorate has taken into account the question whether technology has been sufficiently advanced to devise ways of dealing adequately with these troubles.
The inspectorate had adopted a consistent philosophy, that a plant should not be closed down provided that every care has been taken to remove sulphur dioxide from stacks of power stations and so on. About 95 per cent. of the sulphur is removed from the Bankside power station, for example, but it could be argued that the 5 per cent. still coming from the stacks is causing considerable harm or at least a nuisance. Therefore, plant is allowed to operate even though it has not achieved the ideal result. With the expertise available, the inspectorate is adopting the

right line by not shutting down plants needlessly: it is nevertheless safeguarding both the workers and the public.
Perhaps I might make one or two recommendations. First, the three inspectorates that I have mentioned should remain independent. I hope the Minister will consider this in his consultations. There is no point in merging three dissimilar groups along with others. All should, however, be placed under one Ministry, preferably the DTI. In the Minister's organisation I note that it will be under the auspices of the Secretary of State for Employment, but other sponsoring Ministries will have the right to bring in regulations. There might well be a good deal of inter-committee work which could lead to confusion.
Second, the inspectorate should be allowed to evolve towards integration with EEC facilities. As the EEC is going in this direction, we should take note of the trends and follow them.
Third, if I were to accept my hon. Friend's plan for a unified inspectorate, I hope that I might underline the point that in the integration these three units should remain independent structures so that many of their ideas will not be diluted or lost sight of as they travel up the tree to the higher authority where they will be dispensed as orders or regulations.
I hope that the Minister will set his investigations in train at an early stage, in consultation with the leading bodies, so as to get the plan right for passing into statutory form early in the new year.

6.13 p.m.

Mr. Paul B. Rose: It is perhaps an eloquent testimony and commentary on this Government's priorities that, while they spent the first year of office forcing through a highly divisive and irrelevant Industrial Relations Act, we have waited almost a year for a debate on the vital topic of industrial safety. After that wait, it is only through the efforts of my hon. Friend the Member for Bedwellty (Mr. Kinnock) that we have had the privilege of this debate. The whole House has cause to be grateful to him. It is a disgrace that we have had to wait until today for the Minister to make an announcement, and that a very nebulous


one, devoid of any real content, concerning the Government's intentions over Robens.
It is a source of amazement to me that we as a community can slaughter 7,000 people on the roads every year, and maim countless many more, and can slaughter 2,000 people in industry, through accident and disease, with the equanimity that we do. Indeed, 145 people were killed in the mines and quarries and 498 died of pneumoconiosis in 1969. From 2nd June 1969 to 30th May 1970 no fewer than 710,000 men needed time off because of accidents at work. Of these 146,000 were miners, 92,000 were in the construction industry, 14,000 in textiles and 26,000 in the food, drink and tobacco trades.
The tragedy is that so many of these accidents are unnecessary and quite avoidable. We all know of the uneven floors, the old and dangerous ladders, the obstructions, the unfenced machinery, the carelessly stacked goods, the unheeded complaints, inadequate instruction and inadequate equipment.
Those of us who are responsible in our work for drafting the statements and particulars of claim in industrial injuries cases in court are all too familiar with the remarkable variety of unsafe working places, unsafe plant and machinery and methods that we come across in industry. Those are our everyday stock in trade. Those who see these things being practised will realise that the Robens Report and its philosophy are entirely inadequate. The report in effect reflected society's lack of will to deal effectively with those who offend against the norms laid down by statute and orders.
In many ways the position is analogous with that of driving. It is no coincidence that it was my right hon. Friend the Member for Blackburn (Mrs. Castle), whose PPS I was privileged to be at the time of the introduction of the Road Safety Act, who set up the Robens Committee. When she did so, I am sure that she had in mind the way in which that Act had created the social norm with regard to drunken driving, the taking of alcohol and the danger to life.
When she set up the committee my right hon. Friend emphasised:
our determination to bring the standards of safety and health of people at work up to the

high levels that we have the right to demand in a civilised society
That determination is not reflected in what I would term the logical fallacy of the Robens Report, which is based upon an almost naїve faith in voluntary codes of conduct in industry which are not enforceable, valuable though they may be.
Of course one welcomes the idea of the unification of the inspectorate into one central body—that is the product of any tidy mind—but that does not ensure that real pressure will be put on employers or that the inspectors will necessarily lean on the offenders. Nor does it guarantee that the inspectorate will be of an adequate size. The Minister who is to be responsible has told us nothing about an increase in size. The inspectorate makes pious noises and hands out useful advice, but it should often hand out something a good deal stronger to recalcitrant employers.
The consolidation into one code is also welcomed. That is another product of the tidy mind, and it is rationalisation, but rationalisation does not necessarily mean that improvement will follow. It will follow only if we extend, rather than water down, the existing provisions of the Factories Acts and the other legislation covered in the report, within the ambit of the unified system, so that no one loses the long established protection of those Acts.
The logical fallacy, to which my hon. Friend the Member for Bedwel/ty referred, is to say that because there is too much complicated law which is not being enforced properly one should not rely on it. Of course Robens is right to say that the first duty must lie with management. Those who employ are the ones who should be responsible. What is wrong today is not that there is too much law but that the existing law is not being administered or enforced properly. We need good law which is soundly and efficiently administered. We punish a careless driver; why should we not punish a careless employer? Of course we can sue him at common law, but those of us who are involved in that know of the difficulties. We know about the cost, particularly if an employee is not supported by a trade union. Many accidents occur in small factories where there is very little protection. We know how the insurance companies play for time.


and we know that the insurance companies have vast power against the individual litigant. The length of time taken is itself a serious cause of illness in industry because the period following an accident before litigation often leads to neurosis on the part of the litigant.
There is complete inadequacy of quantum of damage. How does one assess the loss of an eye or the loss of a leg? A very interesting document was put out by the Post Office Engineering Union recently. It referred to examples of this within the context of common law and of the National Insurance Industrial Injuries Act, and said that the compensation for 100 per cent. disablement was £10 a week and the loss of a whole index finger resulted in not a pension, but a lump sum of £495.
Those of us who see the workings of the National Insurance Industrial Injuries Act are aware of the inadequacy of damages, and also that over the years the value of money has been going down. It has been going down even faster over the last three years. Under the social security system, when there is liability without fault 30,000 widows are receiving benefit apart from the wives of those crippled for life and those who have been badly injured.
There is no built-in system to deal with increases in the cost of living. I spent a year looking at the French system. In that at least there is a built-in system whereby as the value of money falls the pension increases. These are things that the Ministry should look at. The Ministry might look at the fact that within the industrial injuries system industrial diseases, if not caused by an accident which is prescribed even on the balance of probability, may have been caused by an employment and these workers are not covered. I raised this matter in an Adjournment debate. They are not covered in spite of the fact that more and more toxic substances and processes are causing industrial disease.
We attach far too little value to the limbs of people working in industry. We attach far too little value to people's hearing and the whole problem of industrial deafness. There is not time to go into it now, but in the past there has been a disgraceful approach to people in industry and far too little attention paid to the

mental hazards in industry. I wonder how many of those who have been caused to take days off through sickness with an aching back or some other apparently physical complaint has been in that condition because of depression or some other mental stress. Not enough attention is paid to that. It is fatuous for the Minister or for the Robens Report to say that we therefore need less regulation and more voluntary codes of conduct.
We have heard about consultation. We need not so much consultation as real control by workers in industry in regard to industrial safety. It may offend some of my hon. Friends when I point out that in the EEC countries, not least in Germany and Holland, there is real supervisory control by workers on management boards and boards of directors—a third in Germany and half in Holland—where they can exercise control. Of course I want to see joint safety committees in factories. I want to see workers exercising control in this way.
Many must have been shocked by the findings of the Public Interest Research Centre and in the report about the small amount of money spent on safety aids and the fact that on the basis of the factory inspector's report a third of the fatal accidents were caused by management directly and alone. The investigators concluded:
that there is insufficient evidence to show that management in general has taken seriously its responsibilities for the health, safety and welfare of its employees. We believe that self-regulation has been tried and has not worked.
There has not been any enforcement, and this is the crux of this whole problem that we are debating.
A duty must be placed upon employers not only to inform the public, not only to bring workers into consultation, but to give them their rights. There is a side problem here—the employee injured by a third party. I have had a tragic example of that in my constituency last week. I should like to see a comprehensive occupational health service and far more emphasis placed on mental health. I should like to see not an independent body but a departmental Minister, rather than an autonomous body, dealing with the whole problem of industrial safety, enforcement and sanctions.
To pursue the analogy about the driver, when a driver is careless we prosecute


him and, if necessary, endorse his licence or take it away from him. Anyone who says that he failed to take action because he was ignorant of what the right action should have been is not making an excuse which is held to be valid, because every driver, if he is to have a licence, ought to take that necessary action. If we take away the licence of a careless, a dangerous or a drunken driver, how much more ought we to take away the licence of employers who do not care for the welfare of their employees? It is not enough for them to say that they did not know or that in some way this was mere negligence and a civil offence. I believe it is a criminal offence and ought to be treated as such. That is the norm we ought to establish, because if it is criminal to use a car in such a way that a person is injured or killed it is also criminal for an employer to act in a way which causes injury or death to other persons.

Mr. Speaker: Order. There are 31 minutes to go and five hon. Members have been sitting patiently waiting to take part in the debate. I hope that I may be able to get them all in; the mathematics are simple.

6.29 p.m.

Mr. Ernie Money: The House is grateful to and has shown sympathy with the hon. Member for Bedwellty (Mr. Kinnock) for bringing this vitally important matter before us, but the House has also shown its undoubted will and I hope that the Government Front Bench has taken this very much to heart so that we may have a full debate on this subject before legislation is brought forward.
In the hope that when that debate comes I may be able to take part, I do not intend to go into the faith and works controversy concerning the Robens Report between the question of legislation and self-regulation, save to say that I was surprised to hear the hon. Member for Manchester, Blackley (Mr. Rose), as a common law lawyer, calling for an extension of existing legislation. Everyone wants clearer and better law on this subject but anyone who has had to deal with that monster of a book "Redgrave's Factory Acts" would agree that what is needed is not more legislation but

simpler legislation that can be understood not only by the practitioner but by those who have to administer it on the shop floor.
I wish to deal briefly with three subjects. I took a lot of encouragement from what was said by the Minister about the need for a co-ordinated research policy in occupational safety and health. I hope that this point will be well to the fore in any legislation which the Government introduce. There is no doubt that the fight for improved safety is a continually changing battle. It is not only a question of the increased use of toxic and corrosive substances, mentioned by the right hon. Member for Devon, North (Mr. Thorpe), but it is also a matter of the changes in technology which make it vitally important that a proper bank of statistics and information should be built up and regularly disseminated throughout industry through an effective information service. This should also deal with the sharing of research results.
I echo what has been said by my hon. Friend the Member for Bedfordshire, South (Mr. Model) about noise. This is no new problem. Sometimes, not only in this House but elsewhere, since the introduction of the code dealing with noise it is spoken of as if it were a new question. The information has been available since 1963, when Sir Alan Wilson's committee reported on noise. The time is coming when, coupled with the importance of greater information on other aspects of safety, there will be a desperate need for more information not only on industrial deafness but about the long-term effects of noise throughout the night, particularly at the end of a night shift. It is the wearing-away effect of continual noise that causes many of the serious industrial accidents just before dawn.
The third thing which I hope will be taken firmly to heart before legislation is brought in is this. It has been inherent in much of what has been said that it is not only the system of safety which needs to be dealt with, overall and quickly, but also the whole system of industrial actions and the recovery of damages. We have at last had the appointment of Lord Pearson's Committee on this subject. I hope that, whatever happens, that report will be made available as quickly as is reasonably possible so that it will not suffer


the same fate as Mrs. Justice Lane's report on abortion, for which we have all been waiting since 1970. I hope that an outline of the Pearson Report will be made available on an interim basis so that when legislation is introduced next Session hon. Members will know just what the proposals are about recovery of damages and so that both that and Robens can be debated together.

6.33 p.m.

Mr. Edwin Wainwright: I compliment my hon. Friend the Member for Bedwellty (Mr. Kinnock) upon introducing this motion and upon his speech. I was surprised at the attitude of the Minister. There is a lot of good in the Robens Report but there are many weaknesses in it. I am surprised that the Minister should have had the audacity to come to the House with an unprinted White Paper and tell us what the Government are thinking of introducing by way of safety legislation. The House should not be treated in that way. Safety is an important subject.
Over 2,000 people lose their lives annually. A great many of these accidents could be prevented. We must remember that we are not legislating for the good employer. We are not legislating for those industries where safety matters are well controlled by the trade unions. We are dealing with the hundreds of employers throughout the country who are indifferent to safety. The Minister recently made a statement which was published in "Safety and Rescue" above the headline:
Smith slams lax scaffold firms.
There were 14 fatalities as a result of faulty scaffolding last year. Out of 40 scaffoldings examined 40 per cent. were weak and unsafe. Then we talk about the employer at the factory observing safety procedure.
The greatest insurance is to make certain that workers are involved and consulted so that they can put pressure on management. When a small firm is involved, what chance has one poor worker of being heard without any trade union backing? There is no chance that he will be heard at all. We must lay the law down firmly about standards of safety throughout industry. Only about 8 per cent. of the accidents which occur in this country result in compensation

being paid to the victim, other than industrial injury benefit. Less than 2 per cent. of all cases for damages go through the courts.
There are many things happening in industry of which we are not really aware. I do not believe that the Robens Committee was aware of them all, despite the fact that it gave us a tremendous amount of information. I hope that we shall be able to have a full-length debate on this subject. I hope, too, that legislation will soon be introduced. We must give careful consideration to those who are employed by the indifferent and bad employers. It is up to this House to make certain that there are laws which will safeguard the lives of our people. We can do that only by making certain that the bad and indifferent employers conform to certain standards.

6.38 p.m.

Mr. Sydney Bidwell: By now the Minister will have got the message from this debate introduced by my hon. Friend the Member for Bedwellty (Mr. Kinnock). It is not good enough to present legislation on such an important subject without prior debate in the House. The Minister should have got the message that we need more than the Robens Report. Earlier I pointed out that the trade union movement has for many years discussed the question of statutory management-worker safety committees in industry. Ultimately, it is from the standpoint of the collective work force that any legal framework can be enforced. This is not a matter essentially for lawyers or for statutes, although they have a rôle to play. The grass roots are much more important in sensing circumventions of regulations. A situation arises, stimulated by statute and regulation, in which discussion can take place.
We all know that on occasions the Factories Acts and their requirements and regulations made under them are breached because workers and management think that by removing safety devices from dangerous machinery output can be increased. We all know from experience that that is very much a two-way traffic in industry. But if, on occasions, factory inspectors are called in by means of a secret communication, that is more likely to be done by a shop steward than by the management, which


is an indication that, while there are many good employers and managements who are safety conscious, there are many others who are not.
My second reason for intervening in the debate is that, as perhaps my colleagues will recall, before I came to the House I was very much involved in trade union education. Questions of health and safety at work have always occupied a considerable portion of the educational programme of trade union studies. The TUC and the National Council of Labour Colleges deal with these matters at summer schools, through postal courses, and so on.
The common law system as it applies to industrial injuries is barbaric. We all know of the battles that take place between lawyers acting for the trade unions, and paid for out of trade union funds, and those acting for the employer's insurers. Often cases are settled out of court. In fact, more cases are settled out of court than inside. That is a barbaric activity in totality and ought to be changed, and the sooner the better.
I draw my hon. Friend's attention to a report about a new measure that has been introduced in New Zealand. I do not suggest that we should slavishly follow that system, but we ought to get away from the present system under which it is necessary to prove negligence by the employer himself or negligence for which he is vicariously responsible.
If there were an accident because of a hole in the floor, if the employer's attention had been called to that hole before the accident he would be held to be negligent, but if his attention had not been called to it he would not. That is nonsense, and we must move away from that situation.

6.44 p.m.

Mr. Michael McNair-Wilson: I intend to confine my remarks to the subject which I thought we were debating, namely, the motion tabled by the hon. Member for Bedwellty (Mr. Kinnock). I congratulate the hon. Gentleman on winning the Ballot and introducing his motion in the way he did. It is to his motion that I propose to speak, and I shall not comment on the Robens Report since that is a totally different matter. I want to restrict my

thinking to the question of industrial noise, because it is a subject in its own right which deserves our attention.
Anyone who has been round a factory, or a series of factories, is aware of the different noise levels there. Sometimes the noise is bearable, but in drop forges, machine shops, furniture factories and so on, the noise is deafening. The strange thing is that although the noise is deafening, seldom are those factories equipped with acoustic devices or other means for dampening the noise. They are nearly always stark buildings which seem, in a sense, to echo and increase the amount of noise being created by the operations taking place within them.
Although that is the case, and although one would have thought that the noise level was intolerable, it is rarely that one sees notices delineating a noise hazard area, or notices that workers should wear ear muffs or even put cotton wool in their ears. The fact is that noise in industry is still taken for granted and is not regarded as a cause for alarm and concern.
Only this month a company of acoustic engineers, R. J. McConnell, of Hertfordshire, produced a report in which it said that
Noise on the shop floor is gradually deafening more than half the workers in heavy industry.
The weakness of the report is that it does not define "heavy industry", and it is therefore difficult to know how many people are concerned. As has been said so often in this debate, however, at least 500,000 people are working in noise levels of 90 decibels or more, and we should not kid ourselves that because they are working at that noise level they are free from the danger of noise-induced deafness, because that is not the case.
The new code of practice—it is the first such document to come from any Government in the history of this country, and therefore my hon. Friend and his right hon. Friends are to be congratulated on bringing it in—makes it clear that if anyone is exposed for eight hours in any day to levels of 90 decibels with the "A" weighting he is at risk. That is the maximum permissible level. Above that, there is serious danger of deafness.
But because we have accepted 90 decibels as the maximum level that can be


allowed and above which damage will occur, we should also take note of another interesting publication by Mrs. Jean Stone, another acoustical engineer who, in "Noise Control and Hearing Conservation", published last month, said:
It is to be hoped that the 90 decibel level will not come to be regarded as the ultimate objective in noise control. It can be shown that daily exposure to levels of 85 to 90 decibels will result in 4 per cent. of the exposed working force developing a moderate degree of deafness, and 2 per cent. will become quite severely deaf.
The irony of it all is that even though we have welcomed Robens today we have not accepted noise-induced deafness as an industrial disease. I cannot press too strongly on my hon. Friend and on the Government that the Department of Health and Social Security should recognise deafness as an industrial injury, because so many experts have proved beyond any shadow of a doubt that it is the case.
I have commented on the fact that the code of practice is the first piece of advisory documentation to be introduced by any Government in this country. Yet for one hundred years or more we have been an industrial nation. One is therefore amazed to find that this subject, which I find so oppressive, has been largely ignored by the trade union movement, to name but one great industrial organisation. I do not know why the unions should be so little concerned about the environment in which workers go about their daily work. Perhaps they are more concerned about finding jobs for people than about the conditions in which that work is carried out. To my mind, excessive noise is an unacceptable pollution of the industrial environment and as such should be stopped.
I have said that the trade union movement generally does not seem to be concerned about excessive noise, but there are honourable exceptions, such as, for instance, the Associated Metal Workers' Society and the National Union of Hose-wear and Knitwear Workers, both of which have set in hand research projects and done a great deal for their workers.
Management is equally culpable with trade unions, except that it might be argued that the unions should be taking up the cause of the employees with the management rather than vice versa.
Therefore, we must introduce a programme for educating the workers about the dangers they are running. On "World in Action" recently there was a programme about noise in industry. In the programme a bulldozer driver was told that the code of practice laid down that the safe dose for anyone working in a noise environment of 105 decibels was 15 minutes a day and that that was the decibel level in the cab of his bulldozer. When asked whether he was worried about it, he said "So long as the money is good, I do not care." That epitomises so much of the attitude to noise.
Industrial deafness does not come on immediately; it is a gradual deterioration and, because it is gradual, it follows that one is not conscious day by day of what is happening. I wish that bulldozer driver could have thought of some of the things which he was letting himself in for when he was gaining all that money. Deafness will certainly be his lot before he finishes his working life. With it will come all the problems of communication, and an almost total inability to enjoy all the money he has earned. He will undoubtedly suffer from all sorts of stress characteristics and unexpected fatigue. And there now seems to be a reasonable connection between the stress created by excessive noise and coronary heart disease.
Therefore, noise in industry is no laughing matter and cannot be brushed lightly aside. Lord Robens's committee argued that there should be legislation to back up the code. However, several Labour Members have cogently asked how we enforce industrial legislation if we rely on the Factory Inspectorate or on the apparently much larger inspectorate merely because we have grouped a whole lot of inspectorates together. Clearly we cannot.
To this extent the concept of self-regulation has a certain amount to commend it. If trade unions were more conscious of the dangers of noise, surely they would be pressing the employers to do more about introducing measures to reduce noise within factories and, where that is impossible, making their workers wear protective ear muffs or cotton wool.
We must look upon the test of hearing as one more medical check that should be made when a worker's health is tested. Once we have established a norm of


hearing, we must go in for continual checks to see how much the hearing has been impaired by the noise of the environment in which the man has been working and, when we have defined the amount of impairment caused by industrial noise, we must introduce a pension or at any rate an injury benefit for those whose hearing has been damaged because of noise at their place of work.

6.54 p.m.

Mr. Arthur Probert: It is no coincidence that my hon. Friend the Member for Bedwellty (Mr. Kinnock) has chosen this subject. My hon. Friend follows a former distinguished Member of the House, Mr. Harold Finch, whose knowledge of industrial injuries and industrial legislation, complicated though it is, was second to none. I compliment my hon. Friend on following that great tradition. Neither is it any coincidence that my hon. Friend represents a mining constituency in which the dread disease of pneumoconiosis is so prevalent.
I would have a great deal to say on the subject of the Robens Report were we discussing it. I have much to say on the motion, but I intend to confine myself to one serious anomaly. We have heard a great deal about bad employers, but the employers to whom I wish to refer are the Government themselves.
I wish to refer to the serious anomaly which arises if an injury occurs to an unemployed person who has been asked to take work in a Government training centre. My hon. Friend has called for new legislation to deal with these matters. To save time I shall refer briefly to the anomaly I have in mind, and I ask the Minister seriously to consider it when he is framing legislation.
A claim for industrial injuries benefit was received by Mr. X on a certain date. He was suffering from dermatitis of the hands and forearms. At the time of the claim he was a trainee motor vehicle fitter in a Government training centre. It has been established that Mr. X suffers from a prescribed disease, but, unfortunately, he was not in insurable employment when he contracted the disease. In other words, he was undertaking a vocational training course, in receipt of training allowances and, therefore, was not following an occupation in the true sense of the word.

He was, therefore, denied industrial injuries benefit.
I took this matter up with the Minister and I received this reply:
Benefit under the provisions of the Industrial Injuries is payable only in respect of incapacity or disablement resulting from an industrial accident …".
This man was being trained in a Government Department. Although he contracted dermatitis he could not receive industrial injuries benefit. If many unemployed workers were fully cognisant of this anomaly they would be very hesitant about undergoing industrial training.
As a consequent of my taking the matter up with the Minister, the Minister suggested an ex gratia payment for my constituent amounting to about £13. What about the continuing effect of the industrial disease of dermatitis? I repeat that this is a Government Department, not the wretched employers we have heard about in so many other instances.

6.56 p.m.

Mr. James Hamilton: After having sat through the whole of the debate I am happy to be able to congratulate my hon. Friend the Member for Bedwellty (Mr. Kinnock) on having introduced it. Unfortunately, I cannot congratulate the Government, because, in their airy-fairy way, they have merely told us that they intend to introduce legislation to implement the Robens Report.
One of the main reasons why industrial accidents occur is the amount of overtime worked. This is a question to which trade unions must apply themselves. The hours worked in British industry are the highest in the whole of Europe, but the holiday rate is the lowest in the whole of Europe. This is another question to which trade unions must apply themselves.
The hon. Member for Walthamstow, East (Mr. Michael McNair-Wilson) said that the trade unions must apply themselves to the question of noise abatement. At every trade union conference scores of resolutions on this question are debated and approved. They are submitted to Governments of both political complexions. Unfortunately, no Government have taken action in the matter.
I pointed out to the Minister in an Adjournment debate that in many factories it is not permissible to have a safety committee. This applies even in organised factories where shop stewards are not permitted, as shop stewards, to be members of safety committees. I hope that the Government will note this matter in introducing legislation.
I learned from an answer to a Question I put that Scotland does not have sufficient factory inspectors. Factories are visited only after three years have elapsed. This is a poor way to look after the safety of work people. I hope that the Government will take cognisance of the points which have been made during the debate because they must be prepared to introduce legislation to deal with a matter that has caused a great deal of concern throughout British industry.

Question put and agreed to.

Resolved,
That this House considers that there is an urgent need for generally improved provision for safety and health at work including extensive education of workers and employers and new comprehensive legislation to deal with precautions against and consequences of industrial accidents and diseases.

Orders of the Day — INSURANCE COMPANIES BILL [Lords]

Order for Second Reading read.

7.0 p.m.

The Minister for Trade and Consumer Affairs (Sir Geoffrey Howe): I beg to move, That the Bill be now read a Second time.
The purpose of the Bill is to improve the protection given to insurance policy holders. It is another example of the measures being introduced by the Government under the general heading of consumer protection. It is clear that we must do all we sensibly can not only to protect the policy holder but also to maintain the name and reputation of our insurance industry which does so much for our invisible earnings. The House will recall that the overseas earnings of this industry in 1971 were £380 million, that figure representing almost double the figure in 1968. More than half of the United Kingdom's invisible earnings come from the insurance industry.
The aim in legislation in these matters is to strike a proper balance between, on the one hand, allowing the industry so much freedom that it can be exploited by rogues and, on the other hand, creating for the industry such shackles that it cannot give an efficient, competitive and forward-looking service to consumers here and abroad. We do not want to set up a detailed apparatus of control as is practised in many other countries to the extent that almost every aspect of the business is very tightly regulated. Our more liberal traditional attitude seems to be more in line with the principles necessary to create a common market in insurance than some of the attitudes found elsewhere. I believe that we shall be able to persuade our EEC partners of the benefits of our pattern. We shall succeed in doing that only if our system works effectively, detecting and, so far as possible, averting situations of the kind that have arisen in the past.
Recent events in the United States have reinforced the need for effective powers in these matters, as indeed nearer home did the V & G case. I have in mind


the Equity Finance Life Corporation on the other side of the Atlantic which the Economist described not many weeks ago as one of the biggest swindles in history. Hon. Members will be familiar with why it has been regarded as the duty of the Government to exercise closer supervision over insurance companies than others. In the first place, it is a business where money comes in first and where claims do not have to be paid out until later, very often much later. The system therefore affords obvious temptations for the unscrupulous and obvious dangers for the incompetent.
Secondly, it is plain that hardship and loss can be caused by the crash of an insurance company, be it a motor company, a life company or any other. We should also remember that there are some risks against which insurance is required by law, principally concerning employers' liability and motorists' third party liability. It is entirely right if we require insurance of that sort by statute that we should see that reasonable steps are taken to ensure that claims can be met. That is the underlying philosophy of the legislation. The Bill reflects the experience of operating important new powers that were established by the Labour Government in 1967. Those powers have been the subject of careful review over the last 12 months.
That review has included discussions with insurers, insurance brokers, actuaries, accountants, lawyers and consumer organisations, and we have tried to take account of as many views as we can, including views expressed by four of my hon. Friends under the leadership, I think, of my hon. Friend the Member for Cheadle (Mr. Normanton) supported by my hon. Friends the Members for Faversham (Mr. Moate), Billericay (Mr. McCrindle) and Pembroke (Mr. Nicholas Edwards). We have not accepted their advice on one main point, namely, the establishment of a registrar, or commissioner as some people prefer to describe him, to supervise these matters.
The principle reason for that was that on balance it was considered right that there should be more direct ministerial responsibility than my hon. Friends' suggestion would provide and we believe that the argument that greater expertise would be necessary for Ministers and for

my Department could be met and is being met by the appointment of and the securing of advice from other experts within the Department. We have taken account of the other suggestions made by my hon. Friends together with the suggestions put forward by other people.
We have also taken advantage of the exhaustive independent investigation of the pattern of supervision of the V & G group which was to be found in the report of the tribunal which was set up under the Tribunals of Inquiry (Evidence) Act 1921 and which was debated in the House on 1st May last year. Also, we have recently received the report of the committee under the chairmanship of Sir Hilary Scott who was examining a comparatively new development—the linking of the value of life insurance benefits to that of specified categories of assets.
The Bill has already been subject to careful scrutiny and helpful amendment in another place. One point made in the course of the debates there by my noble and learned Friend the Lord Chancellor has since been subject to some criticism and I should like to take this opportunity of making it clear that that criticism is misconceived. The point I have in mind concerns our attitude towards reinsurance. I believe that the United Kingdom is, apart from Switzerland, the only net exporter of insurance and reinsurance services. That being the case, it would clearly not be in our interests, by practising discrimination against foreign insurers, ourselves to encourage it in others.
The allegations that I have in mind, recently made, were to the effect that we require companies seeking authorisation to carry on insurance business here to place a high proportion of their reinsurance with British companies. Of course we look critically, as the 1967 statute requires, at the extent and quality of reinsurance arrangements proposed by such applicants. Sometimes they are found not to be acceptable without some modification. However, the point I wish to underline is that there is certainly no presumption that an individual reinsurer who is net authorised in Great Britain is ipso facto unsuitable.
I turn now to the main provisions of the Bill and I shall try to describe them briefly under four general headings,


beginning with the powers of intervention, then turning to what has come to be known as the "fit and proper persons" problem, followed by a word about long-term policy holders and a word about other new provisions and improvements. First, as regards the powers of intervention, if hon. Members look at the extensive list in Schedule 2 of sections of the 1967 Act which are to be repealed they will see an important feature. If they compare the repeals there set out with Clauses 12 to 24 of the Bill, it is clear that we are not here seeking to invest the Secretary of State with a brand new range of powers to control every move. They will see that we are seeking instead to ensure the breadth and effectiveness of the powers that are necessary. The object is to make sure that we can combine flexibility with effectiveness.
The new clauses confine the Secretary of State's powers to requiring an insurance company to take some specified action in order to protect its policy holders from the risk that their claims might not be met. In the main, the actions are the preventive and remedial measures which the Department was given the responsibility for securing after the failures of insurance companies in the early 1960s. In the course of time they have been found to be broadly right but sometimes inflexible or crude in detail. On occasion there has been some hesitation about using the powers for fear of precipitating by their very use the risk of insolvency which they were designed to avert.
Those powers are reformulated and regrouped with the object of giving more flexibility in the choice of the kind and extent of the action to be taken in differing circumstances. They will permit in this form the application of a fairly mild precautionary requirement at an early stage and allow it to be progressively intensified if necessary to correct a threatening development.
There is a good example in one of the most substantial powers at the Secretary of State's disposal, which appears in Section 68 of the 1967 Act and in Clause 13 of the Bill, the power referred to as the power of restriction. A restriction order requires that the company shall cease accepting any premiums for new

policies or renewals but shall continue to deal with claims coming in under the policies still in force and the settlement of claims already incurred. That is obviously a process that could take a number of years.
Under the 1967 Act such a requirement could be applied only to the whole of the insurance business, although the threat to solvency might lie in one particular part of it only. The clause permits a more discriminating intervention—for example, to halt the taking on of more motor business while allowing a perfectly healthy life or property insurance business to continue normally. There are similar refinements in other clauses in this part of the Bill. The grounds on which any of the powers may be used are set out in one place—Clause 12 —instead of being separately associated with particular forms of intervention.
Apart from those requirements, to produce a more flexible pattern of administration there are two new provisions in this part of the Bill, both in Clause 12. Subsection (3) permits the powers of investigation in Clause 20 to be exercised not only where a company's viability is suspect but also where that is not the case but where more information is considered necessary in the interests of policy holders generally. Subsection (5) of Clause 12 permits the forms of intervention specified in Clauses 13 to 20 to be supplemented or replaced by other action where that appears to be more appropriate for the protection of the policy holders. Those are matters that can be considered in more detail in Committee.
I turn now to the "fit and proper persons" provision. An important aspect of the requirements introduced in 1967 was the need for an authorisation to carry on any class of insurance business. The duty was laid upon the Board of Trade, as it then was, under Section 64, to be satisfied before granting such authorisations that the people who would hold key positions were fit and proper persons to carry that responsibility.
We have examined the Department's experience of administering those provisions over the years. In addition to the initial scrutiny, Section 68 of the 1967 Act permitted the power to restrict business, of which I have already spoken, to be invoked if it were subsequently


found that an unfit person was already in one of those positions. Our proposals dealing with that group of matters are to be found in Clause 2, Clause 12(1)(e) and Clauses 22, 23, 33 and 34. They were the subject of a great deal of discussion in another place.
The task has been to try to strike a reasonable balance between the two essentially conflicting considerations of fairness and effectiveness. Nobody can doubt that in 99 cases out of 100 the cause of an insurance company's getting into trouble is incompetent or dishonest management. The lesson comes out very clearly from the report of the V & G tribunal, where both matters are referred to. In paragraph 354 the tribunal said:
The real cause of the loss was the mismanagement of the Company's affairs".
In paragraph 196 it said:
The Company was conducting its affairs with the panache and imprudence of a gambler.
I must warn the House that I do not believe that the job can be done—at least, not effectively—if we allow entry into the business of those about whose ethical standards or technical competence there must be some legitimate doubt. Inevitably, it is a matter for subjective assessment of possible developments in the future and not judicial determination of past events. There must be a risk of some unfairness, although there is no suggestion that it has been realised in the past five or six years.
Parliament in 1967 struck a balance between fairness and effectiveness by drawing certain distinctions between prospective entrants to key positions and sitting tenants. On the whole, that has proved satisfactory. Probably it is still not stringent enough to amount to anything like a guaranteee of reliability. That would probably be unattainable, but we believe it right to leave it on that basis, with two principal changes: first, to close the loophole that exists when control of a company changes, and, secondly, to give an individual whose unfitness comes to light when he is already in post an opportunity to demonstrate on his own behalf that that judgment is mistaken, instead of restricting that right to the company in

question. Inevitably, giving that additional opportunity must mean some delay in the exercise of the Department's powers under the legislation.
There is another important group of provisions. Clauses 7 to 10 tighten up the arrangements for the protection of the interests of holders of long-term policies —that is, life policies—including the reasonable but non-contractual expectations of with-profit policy holders. Clauses 30 and 31 ensure that every effort is made to insulate the long-term policy holders from the consequences of mismanagement of any other kind of business carried on by the same company.
There are other new provisions and improvements. The ones I have so far discussed are really the 1967 provisions in a more sophisticated and up-to-date form. The new provisions, to some of which I should like to draw the attention of the House, include Clause 5, which contains a power to prescribe returns to be made more frequently than annually. That power will enable the fortunes of insurers to be monitored more closely and will enable signs of deterioration to be detected more quickly. They are, in a way, a complement to the revised powers to intervene earlier and less drastically that I have already described.
Clause 6 will enable unusual and potentially undesirable transactions to be required to be notified promptly.
In Clause 32 there is power to describe how assets and liabilities are to be valued for the purpose of determining compliance with the statutory solvency standards. That will include a power to require certain forms of asset, such as goodwill, to be ignored for that purpose. The general effect of the regulations to be made under that clause will approximate to the ideas set out in the V & G tribunal's report that an insurance company's solvency should be looked at on the assumption of an imminent break-up instead of on the more general going-concern assumption.
Clause 41, which replaces Section 25 of the 1958 Act, provides for the making of regulations as to the content and form of insurance advertisements. Clause 42 will require intermediaries who offer the services of an insurer with whom they have a special connection to reveal that fact.
There are less notable but none the less useful improvements to the provisions of the earlier Acts. These will pave the way for consolidation of this legislation, hopefully in the fairly near future, in a single statute.
The House will want to know how far the Bill can or will take account of the recommendations of the Scott Committee. We have been having consultations about that already, and I hope we will be able in Committee to introduce any necessary new clauses to take account of the report of the Scott Committee. I do not believe that they need be very numerous. We have kept in touch with the committee's thinking and we have been able to anticipate some of its more general proposals. We have also considered the points made by Miss Roberts in her note of reservation.
Like a number of the present clauses, I expect that some of the new clauses designed to implement the Scott recommendations will empower the Secretary of State to make regulations covering the complex and technical matters which arise. All those regulations will be laid before both Houses and will be subject to the negative procedure. It is in that way that we shall be able to work out, after further consultation, the most practical measures to protect the public. We shall be able to keep abreast of new developments as they arise with refinements and adjustments.
There will be a considerable amount of work in preparing the new regulations and revising the existing ones. We shall do our best to avoid unnecessary delay in putting the necessary flesh on the skeleton which the Bill provides. I hope that the proposals to provide more resources for the protection of consumers in this important area will command the support of the House.
The concluding section of the Explanatory Memorandum sets out our plans for building up a staff of the right calibre and experience. We are trying to introduce ready-made skills and, on the lines suggested in paragraph 351 of the Vehicle and General tribunal's report, we already have the good fortune of securing the services of a former general manager of a reputable insurance company to reinforce and supplement the experience which already exists within the Department.
We must strike a balance between overstaffing and under-staffing. Paragraph 351(c) of the Vehicle and General tribunal's report questioned the adequacy of the staff which has been provided in recent years. Since then we have increased the staff from 30 to 60. We propose to go further than that, as the Explanatory Memorandum sets out. The ultimate total envisaged is about 100.
No conceivable system of supervision can provide a complete guarantee that there will be no failures even if deliberate fraud could be ruled out. It is inherent in insurance business that a view has to be taken of events in the future which must occasionally turn out to be wrong to a degree which defeats what appeared at the time to be prudent judgment.
We must take a view as to the point at which the return from increased expenditure on supervision diminishes so sharply or at which the interference with the normal sensible conduct of the business imposes such intolerable costs at the expense, inevitably, of the policy holder that it is right to draw a line. We believe that the improvements in the system of supervision which the Bill makes or will permit us to make mean that we have arrived at what is the right and proper balance. We believe that that is the right way of dealing with the problem because it extends consumer protection.

7.22 p.m.

Mr. Anthony Wedgwood Benn: The right hon. and learned Gentleman's manner in presenting the Bill was so quiet and modest that perhaps the House may not have appreciated the significance of the Bill. Maybe the right hon. and learned Gentleman does less than justice to the legislative innovations contained in the Bill. However, the Opposition support the Bill on Second Reading though we shall be moving amendments in Committee.
I am bound to draw attention to the fact that in the Bill the Government take substantial steps further forward in intervention in private business. I compare the attitude described by the right hon. and learned Gentleman with the letter written by the present Under-Secretary of State for Trade and Industry, the hon. Member for Harrow, Central (Mr. Anthony Grant), who was then at the


Board of Trade, in response to a letter written to him by my hon. Friend the Member for Birmingham, Northfield (Mr. Carter) in July 1970 about premiums generally. The hon. Gentleman's letter concluded that in respect of the Government's attitude towards insurance—taking what the Secretary of State for Employment and Productivity said—
where there is competition that is the most effective means of safeguarding the consumer and the less it is interfered with the better.
The hon. Gentleman's letter continued:
I remain of the view that the motor insurance market is competitive.
Without making too much of that, the Bill is part of the story of intervention which we have seen in other areas.
After the collapse of the Vehicle and General, we had the tribunal of inquiry. I fear that injustice was done. All the blame was put upon a civil servant. One of my right hon. Friends who had held a ministerial post in the Board of Trade explained his attitude in debate. He indicated that it was wrong to blame civil servants. Even under the legislation which this Bill amends, consolidates and extends, the ultimate responsibility in Government rests with Ministers. I think that the civil servant in question, Mr. Jardine, was badly used by the tribunal.
Following the Vehicle and General inquiry and the tribunal's report the Government got to work on this Bill, and rumours about it began spreading quite early. I quote the Sunday Telegraph of January of this year:
What is chiefly worrying some of the smaller companies is that Mr. Walker and his legislators might over-react to the V &amp; G disaster and bring in a Bill which would discourage new entrants into the insurance market, hit the smaller groups and favour the 10 or so giants who already do much of the business in the thriving London market.
When the Bill was finally published The Times on 28th January ran a leader under the heading "A Far-reaching Bill." The leader said:
The Government's Insurance Companies Bill, unveiled at the end of last week, could briefly (but not unfairly) be characterised in the following terms. It will give the Department of Trade and Industry powers to do anything at any time to any insurance company without giving any reasons.

I recognise that some amendments were made as a result of a debate in another place. The Times leader continued:
For an industry which has historically operated with the minimum of Government intereference, the Bill thus constitutes a watershed of Himalayan proportions.
The Minister in introducing the Bill managed to reduce the Himalayan mountains to a mere bump in the middle of the road. This is, of course, a significant Bill.
There is much comment in the Press about the debates going on within the Labour Party as to the extent of intervention that there should be in private industry. We shall be continuing those discussions on Wednesday, as every reader of the newspapers knows. I take the opportunity of drawing to the attention of the Government Front Bench how much we have been guided by its developing thinking through the successive somersaults of the last three years.
I shall commit the offence which I hope the Minister will forgive of quoting his Bill. I shall go quickly through some of the powers which the Government think it necessary to take. I recognise that some of them represent the consolidation of Companies Act legislation passed by the previous Government. Clause 2(1) says:
The Secretary of State shall not issue under section 61 of the Act of 1967 an authorisation with respect to an incorporated company if it appears to him that any director, controller, or manager of the company, is not a fit and proper person to be associated with the company.

That is direct control of appointments

Clause 6(1) says:
Classes or descriptions of agreements or arrangements appearing to the Secretary of State as likely to be undesirable in the interests of policy holders may be prescribed for the purposes of this section".

The clause goes on to say how that should operate.

I now move to the general powers of the Secretary of State. Clause 12(1) says:
Any power conferred on the Secretary of State … shall be exercisable on any of the following grounds (a) that the Secretary of State considers the exercise of the power to be desirable for protecting the policy holders or potential policy holders of the company ".

Clause 13(1) says:
The Secretary of State may require a company—(a) not to effect any contracts of


insurance or contracts of insurance of a specified description".

Clause 14(1) provides:
The Secretary of State may require a company—(a) not to make investments of a specified class or description".

That is a power which would permit another Government to prohibit investment in South Africa, for example, were that to be advisable in line with Government policy of the day.

Clause 20(1) provides:
The Secretary of State may require a company to furnish him, at specified times or intervals, with information about specified matters being, if he so requires, information verified in a specified manner.

Clause 21 says:
The Secretary of State may require a company to take such action as appears to him to be appropriate for the purpose of protecting policy holders or potential policy holders of the company".

Then there is the power over appointments, contained in Clause 33(1):
No insurance company to which the Act of 1958 applies shall appoint a person as managing director or chief executive of the company unless".

Then come the provisions that such appointments shall be confirmed by the Secretary of State. To make arbitrary power even more arbitrary, we read in Clause 38(1):
The Secretary of State may, on the application or with the consent of an insurance company to which the Act of 1958 applies, by order direct that all or any of the provisions to which this section applies shall not apply to the company or shall apply to it with such modifications as may be specified in the order.

Just to carry the process of intervention through to its final conclusion, we read in Clause 41(1):
Regulations may be made as to the form and contents of insurance advertisements.

Had such a Bill been put forward or such powers been taken by the Labour Government, the Conservative Party would have had a field day about a monstrous intervention in private industry. I remind the House again of what the then Parliamentary Secretary to the Board of Trade said in 1970:
I remain of the view that the motor insurance market is competitive"—

referring to a Cabinet colleague's view that
competition …is the most effective means of safeguarding the consumer".

The Bill represents, therefore, a substantial change in the Government's thinking.

I say to the right hon. and learned Gentleman that with power goes responsibility, and every policy holder will now be entitled to regard the Secretary of State for Trade and Industry as the watchdog of his interests and, in a very particular sense in the light of the provisions of this Bill, a guarantor of his policy, for if any man now loses money in an insurance company if it goes bankrupt or cannot meet its obligations, after these powers have been taken by the Government the Secretary of State will become responsible because he will have failed to use the sweeping powers which Parliament has given him under the Bill.

Mr. Nicholas Edwards: I accept that these are sweeping powers but the right hon. Gentleman is forgetting that many of them were contained in the Companies Act 1967. Many similar quotations could be extracted from that Act, for which the right hon. Gentleman was responsible. This Bill repeats or tidies up many of them.

Mr. Benn: If the hon. Gentleman reads HANSARD tomorrow he will see that I referred to the fact that this Bill consolidates, amplifies and extends the powers of earlier legislation. I am saying that the present Government have already intervened further in insurance—indeed, into other types of business—than any of their predecessors. An indication of what this means is that the administrative costs of the Department will rise. We have the figures—£170,000 at 1972 prices in April 1971, £310,000 in January 1973 and £540,000 in 1974. This has to be set against the rather boastful answer given by the Treasury today about the number of civil servants. The Bill increases the Civil Service, and quite rightly, with this power of supervision to discharge.
In addition, the amount of inspection involved is bound to increase the administrative costs of the insurance companies. If they are to become liable to be asked to give information, to verify it, and to provide the books at the request of the Minister, their administrative costs will rise. I draw attention to the costs of administration in private insurance already. On the 1970 figures, ordinary


life policies already involve 17·8 per cent. of the premiums in administrative costs; industrial life policies 33·7 per cent.; fire policies 39·1 per cent.; accident policies 37·8 per cent.; and motor insurance policies 30·9 per cent. These figures must be contrasted with the National Insurance Scheme, in which 5 per cent. of the premiums goes in administrative costs, or with the Industrial Injuries Scheme, in which the figure is 12 per cent. These figures are available in the Annual Abstract of Statistics of the Department of Health and Social Security.
Let us turn from that to the profits of the insurance companies. I quote three of the major companies—Commercial Union, General Accident and Sun Alliance. In 1964, at a time when the Conservatives were in power, the profit of Commercial Union was £6 million; in 1971 it was £33·5 million, an increase of 558 per cent. The profit of General Accident in 1964 was £3·6 million and in 1971 £18·4 million, an increase of 511 per cent. In 1964 the profit of the Sun Alliance was £2·5 million, and in 1971 £19·4 million, a rise of 776 per cent. This did not, however, stop premiums from rising.
According to the Financial Times of 11th February, an increase in Commercial Union insurance premiums requested was about 20 per cent. Of course premiums are very much higher than they were three or four years ago. This is the obvious reason why I, speaking for myself, should prefer to see something different. I should prefer to see consideration given to the question of whether, for certain forms of insurance such as life assurance, accident insurance, ills which befall every one of us, we ought not to recognise that competitive private enterprise is no longer appropriate. We ought to consider whether the community should not organise this national service on a national basis. It would clearly lead to an enormous saving in administrative expenses; and most of the problems with which we are battling in this Bill, and in the earlier Bills, would no longer arise. The protection of the policy holder would be complete; his savings, which would need to be held and managed on a commercial basis by an entirely independent body, would be secure; failure and fraud would no longer

arise; the policy holder would get more for his money.

Mr. Peter Rost: The right hon. Gentleman has quoted profit figures for two years and premium percentage increases. Would it not be fairer to relate the two by quoting the profit figures as percentages of the turnover of the companies—the premium income—taking off the investment income which has contributed to the profit, which is a reserve?

Mr. Benn: This is a matter for argument but I will satisfy the hon. Gentleman by reading the leading article in the Sunday Express of 18th April 1973. It said:
In the face of a profit increase from £18 million to £33 million, the General Accident Assurance Company is applying to the Department of Industry to raise its car premiums by 10 per cent.
Other companies with bumper financial results are asking even more. Some want to soak the motorist by an extra 20 per cent.
How can such monstrous increases possibly be justified when profits are booming?
I do not often find the Sunday Express having similar views to my own, but when I do the hon. Gentleman will appreciate why I brought such an article with me, and use it to rebuff interventions like his.

Mr. Joseph Ashton: My right hon. Friend has compared the administrative costs of the private insurance and national insurance. Another difference, of course, is that the National Insurance Scheme has tribunals to which the consumer can appeal against a decision. That is not the case in private insurance, in which the companies lay down their own law.

Mr. Benn: My hon. Friend is right. These arguments all deserve further consideration, and we shall be discussing them in Committee. There will be a continuing public debate about them.
As far as motor insurance is concerned, there is a strong feeling, which I share, that where the State requires a person to have third party insurance, and where the question of responsibility is utterly irrelevant—if an old lady has been knocked down here, or there has been an accident there—the provision of private enterprise in this form may not be the


best way to handle it. I put this to the House because it is a view shared outside the House which should be reflected in it.
I come now to the very important question whether the inspection which the Minister provides for in the Bill will be effective. It is arguable, at any rate, that in the case of V and G—I am not saying that the new powers would not have been desirable—the problem was a failure of implementation of existing powers and not, unarguably, a question whether further powers were needed.
The Equity Funding case in America has been commented upon very widely in all the insurance Press on both sides of the Atlantic. The Investors Review carries the headline:
How Equity Funding took 100,000 people for a £100 million ride.
The Investors Review says this about this extremely important case:
Exactly how it happened is also anyone's guess. Laziness and sloppiness are the answers often heard on Wall Street. Everyone assumes that in a tightly regulated industry, no one would have the nerve to break the law. The rules are too clear, and threat of an unannounced audit too frightening.
The Investors Review then says:
Apparently all appropriate authorities felt the same way, believing that no company that advertised as often and as openly as Equity Funding would dare violate the law. So the SEC and the various insurance regulators never bothered staging an audit. Reinsurers never bothered checking on the validity of the policies they bought. They assumed Equity Funding had been audited by state regulatory agencies and the SEC.
The problem will begin for Ministers when this House grant them these sweeping powers. They will then have to train themselves and their Departments to intervene vigorously to see that such things do not happen again.
Since V and G we have had the report of the Ombudsman on the Department of Trade and Industry's failure to deal with the collapse of the Competitive Insurance Company in June 1971. I quote from the Financial Times of 30th April 1973:
Sir Alan does not suggest that early action by the DTI would have saved Competitive from collapse or that it would have been brought about earlier, thus saving at least part of the losses incurred by the company's 30,000 policyholders. But he does lay blame on 'lack of thoroughness' in certain aspects of the DTI's inquiries and on 'defects in the department's administration'.

I have some sympathy for civil servants who are required by Parliament to go into this very complicated area and to intervene, because this involves the judgment whether to intervene and how much to bother the Minister, always with the risk that one may be blamed by a tribunal afterwards if one does not take every problem to the Minister.
I come now to the report on Linked Life Assurance. The minority report of Miss E. R. C. Roberts says:
With the Committee, I do not believe that the solution lies in giving greater power of control to the Department than we have proposed. The additional protection needed, particularly by the unsophisticated public, would be best provided by the appointment of an active, energetic, commonsensible Insurance Commissioner, with a small, energetic, commonsensible staff, who would be entrusted with the task of looking after the interests of consumers in the field of linked life assurance.
I cannot necessarily confirm that argument, because I could not claim to know enough to assess it. However, the Minister will have to give better reasons why he has not chosen to adopt the method of a commissioner to safeguard the interests of the public, with whom necessarily the policy holder would have a more intimate relationship than is the case between a member of the public and Parliament.
Finally, the Bill raises much wider issues than the Minister appeared to recognise in his opening speech. I shall not go into those issues, because it would be inappropriate, even on a wide Second Reading debate. But if the Government now find it necessary to take sweeping powers of this kind to protect policy holders, why is it that other classes of people in industry are less well protected? Why should not such sweeping powers be taken to protect workers in industry generally, in firms threatened with redundancy? Why should not powers be taken widely to deal with issues that arise in business where the national interest is involved? Without emphasising the current case of Lonrho, why should it be that the Minister is able to intervene if he thinks that the policy holder of a particular motor insurance company is adversely affected but is unable to intervene in cases where the national interest or the interests of workers may be involved?
The Bill is a watershed of Himalayan proportions. The precedents created in the Bill will be of great value to an incoming Labour Government, to be studied, examined, extended and used more widely. For this reason I hope the House will feel able to give the Bill a Second Reading.

7.46 p.m.

Mr. R. A. McCrindle: I am reluctant to follow the right hon. Member for Bristol, South-East (Mr. Benn) into the matters on which he started to touch at the end of his speech. I follow him, however, in agreeing upon all he said about the very wide-ranging nature of the powers that the Bill gives to the Department of Trade and Industry.
As I listened to the right hon. Gentleman, however, I wondered whether he was entirely right to criticise the Government, as I thought he was criticising them, for having taken these sweeping powers. Perhaps he was saying that the Government were not admitting that they are wide-ranging powers. I accept that they are wide-ranging powers. It was necessary to have the wide-ranging powers that are embodied in the Bill. I should have thought it a sufficient justification to say that, where it can be proved in the public interest that private industry requires to be policed in some way, as the Bill undoubtedly allows the insurance industry to be policed, the policing should not be for strictly doctrinaire reasons. If the right hon. Gentleman and I have any measure of agreement, however, it is on the fact that these are wide-ranging powers and that they are necessary.
I am prepared to welcome the Bill and the powers that it introduces. I have been involved in the insurance industry for over 20 years. For a great part of that period the majority of British insurance has been synonymous with security and integrity, and 95 per cent. of the British insurance industry could still rightly claim that security and integrity continue to be its watchwords. However, the failures of the past few years, culminating in the Vehicle and General debacle, have raised strong doubts in the public mind as to whether the trust that has been extended over the years to British insurance companies is still justified.
The Vehicle and General failure was the culmination of several failures over many years. Without trying to make a party political point of it, it is fair to say that many of these failures took place at times when the Labour Party was in power. But the Vehicle and General failure was large enough to have a dramatic impact beyond any preceding failure. It forced the Government, as it would have forced any Government, to examine the conduct of companies and to see whether the powers of the Government to intervene and to regulate the conduct of the insurance business were sufficient.
It is fair to say that it surely cannot be said that previous Governments had no powers to intervene in past insurance company failures. In retrospect I suggest that several Governments, of both major parties, had perhaps an imperfect understanding of insurance companies' operations. They also had a fear of acting in case by their action they compounded the difficulties which they sometimes suspected. Therefore, Governments of both political complexions have held back. I wonder whether this holding back has been partly due to the inexperience of those in the Department of Trade and Industry and whether their number has been inadequate. Whatever else may be said, even before the introduction of this Bill that at least has been taken care of and the number of inspectors in the Department has already been increased.
The Bill is a recognition that the public undoubtedly require protection from some of the sharks who undoubtedly have been running the motor insurance companies in recent years. I believe, however, that it is also a recognition of the fact that the Government wish the public to go on benefiting from competitive private enterprise. With regard to the ability of British insurance companies to keep down premiums in past years, it must be pointed out that in comparison with countries overseas British motor insurance is still inexpensive. I contend that that is one of the benefits we derive through having a competitive private enterprise system in motor insurance.
Labour Members in challenging our system put forward the panacea of complete or partial public ownership. I suggest that nationalisation of motor insurance would mean, first, that the overall cost to a motorist would be more than it


is at present; and, secondly, that those who would benefit would be the substandard drivers and, therefore, the average motorist inevitably would pay more for his motor insurance.

Mr. Ray Carter: As regards the comparison of premiums between the United Kingdom and other countries, is not the hon. Gentleman aware that the principal reason for what he has said, is the fact that British drivers are recognised to be—this can be proved statistically—among the safest in the world, and that the cars of British owners do not get damaged to the same extent as cars in other countries?

Mr. McCrindle: I would not contest that, and I am delighted that I gave way to the hon. Gentleman to allow him to make the point. But I am sure he would not contend that that is the only reason why the British motorist pays less for motor insurance. If I concede the hon. Member's point, I am sure he will concede mine, namely, that part of the reason is the competition between insurance companies. I accept that sometimes competition has been carried too far, with results which we are now discussing. I contend that at its best British motor insurance is the least expensive of many Western European countries, and I hope that the hon. Gentleman will concede this.
I believe that, following the V & G affair, the Government are right, to come down on the side of freedom, competition, publicity and accountability. I believe that that is what the Bill is all about.
The Bill is on the right lines since it gives extensive powers to the Department of Trade and Industry. The right hon. Member for Bristol, South-East said he hoped that the powers would be used effectively. I hope that they will be used reasonably, because the Bill gives the Department very wide powers.
I wish to express some little concern about the dependence which the Bill places on future regulations the contents of which we cannot at this stage know. I hope that when the regulations are introduced there will be a reasonable recognition of the fact that the great majority of British insurers have nothing to fear from compliance with the regulations. Equally, however, they do not require any

undue intervention in their day-to-day activities by the sort of powers to which the Bill could lead if introduced in a malevolent way.
I wish to make one or two observations on points arising from the Bill. My first point relates to investment. A large part of the Bill concentrates on the protection of life funds. It is right to give the Government of the day power to intervene as provided in the Bill, but I wish to express fears—and my fears are reinforced having listened to the remarks of the right hon. Member for Bristol, South-East—about the danger that a future Government might require investment in a certain direction. I hope that long before we ever have a Labour Government—if indeed we ever have such a Government—the way in which the powers are used by the present Government will blaze the trail so that it will be more difficult for a future Government to intervene in the way in which I fear might happen.
I turn to the subject of solvency. The British Insurance Association has a point when it says that the power of the Secretary of State to alter the margin of solvency required by giving no more than three months' notice could compound the difficulty which such a step would be aimed at solving. I hope that when my hon. Friend the Under-Secretary of State replies to the debate he will give his reasons why the Government feel that so short a period is required.
I should like to say a word or two about life insurance. There is no doubt that there is a major need to protect life policy holders. It might well be that the V & G affair would be as nothing compared with the outcry which would follow the failure of a major life insurance company. I found the Scott Committee's report a little disappointing and rather inadequate. I suggest to my hon. Friend that some Government amendments could be tabled in Committee to go beyond the confines of the Bill as now drafted. In retrospect, I feel that the Government were wrong to draw the terms of reference of the Scott Committee so narrowly.
As one who has had long experience in life insurance, I do not see the difference between unit-linked or property-linked policies on the one hand and conventional with-profit endowments on the


other hand. I believe that if the Government wish to give protection to life policy holders from defalcation by insurance companies, it should apply to life funds of all kinds and not simply to those tied to equity or property.
I regard some of the Scott Committee's recommendations as valuable—for example, the cooling-off period following a sale is something which most honourable companies will welcome. Such companies will want the persons to whom a policy is proposed to be sold to be given sufficient time before closing the deal to enable him to change his mind. If a new clause is introduced in Committee on this topic, I shall welcome it.
Clause 41 gives the Government power to intervene on the form of advertisements by insurance companies. I read with interest the Scott Committee's comments on the rules which it would like to see introduced on such matters as graphs in brochures and advertisements. Although this may seem a tiny point, I must stress that there is no doubt that the opportunity to mislead in graphs set out in brochures and advertisements is considerable. I suggest to the Government that an amendment to Clause 41 might be desirable in this respect.
On a much wider plane, perhaps the Department of Trade and Industry should have a specialist staff composed of people with experience of life assurance. I have been struck by the approach of its Insurance Department in assuming that all classes of insurance are the same. There are many separate types of life assurance which require to be taken care of, so much so that, although I cannot go quite as far as Miss Roberts did in her minority report about the justification for the appointment of an insurance commissioner, I believe that my hon. Friend the Under-Secretary would do well to consider the possibility of having a specialist staff in his Department composed of people who are knowledgeable in life assurance, possibly with powers to monitor life assurance developments. This is a very fast-moving business. One has only to compare the average life assurance policy today with that being sold in 1963 to see what a dramatic transformation there has been. With

respect to the Department of Trade and Industry, sometimes I wonder whether its Insurance Department's staff is capable of keeping up with the many competitive developments taking place, in the interests of policy holders.
I suggest, too, that there is a strong argument for powers being taken in Committee to control selling methods. If my hon. Friend the Under-Secretary cares to look at any of our weekend national newspapers he will find any number of advertisements placed in them by insurance brokers. Here I speak with an interest as an active insurance broker. Many of those advertisements give highly misleading impressions of the likely results of investing money through those firms.
I should welcome additional powers to control activities of this kind. As to whether it is sufficient to relate them to Clause 41, I am open to persuasion. But certainly the Government should give fresh consideration to many aspects of the life assurance business following the publication of the Scott Committee's report.
I give a warm general welcome to the Bill. It is very much to the credit of the Government that, having taken the line which the right hon. Member for Bristol, South-East was inclined to ridicule, they are now disposed to accept that, when the public interest demands, private enterprise should continue to operate, but that reserve powers should be held to make it more accountable to the public. Freedom with publicity should be the watchword. I believe that it is in that context that the Bill has been introduced. I for one support it.

8.4 p.m.

Mr. Ray Carter: First, I apologise in advance because I shall have to leave almost as soon as I have spoken. I mean no disrespect. I shall, of course, read the report of the full debate when it is published in HANSARD.
The Bill stems directly from a number of factors, the principal one being, I suppose, the collapse of the Vehicle and General Insurance Company when more than a million motorists lost their cover. I have never believed that the public fully understood the enormity of that collapse. It may be that the scope of the


Bill gives some indication of the Government's knowledge of what that collapse meant to the motoring public. With the collapse of the company, 10 per cent. of our motorists lost their cover.
Then we had the findings of the tribunal inquiry into the V and G collapse, which found fault with almost everyone with whom it came in contact.
A third factor is the growing foreign participation in the British insurance market. It has grown over the years. Very often those foreign interests do not go about their business in quite the way that we do.
Then there is the topic touched upon by the hon. Member for Billericay (Mr. McCrindle), which is what was held to be the possibility of a collapse of a life company at about the time of the Vehicle and General collapse some two years ago. That would have provoked even stiffer measures than we have in this Bill. We are very lucky, given the inflation that we have seen in the past two or three years, to have escaped completely the collapse of a life company.
All these questions have been posed, and the Bill is the Government's answer. The Opposition support it entirely. I do not believe that it goes anywhere near far enough. However, before explaining why I hold that view, perhaps I might look at the Government's record in insurance and their attitudes to it over the past 2½ years, and compare the Bill with the Government's philosophy at the beginning of their period in office. It will be recalled that 2½ years ago the solution to all our problems lay in the philosophy of competition, the law of the market place and so on.
My right hon. Friend the Member for Bristol, South-East (Mr. Benn) has quoted the very famous letter on the subject. I shall have to requote it. It bears requoting. The Under-Secretary wrote it to me. Since first coming to this House, I have received a great many letters from Ministers most of which contained very little that I wanted to preserve. However, I shall always keep two letters. One was from the hon. Member for Cirencester and Tewkesbury (Mr. Ridley), once again, funnily enough, associated with the Vehicle and General collapse. The second one was from the present Under-Secretary—

The Under-Secretary of State for Trade and Industry (Mr. Anthony Grant): This was nothing to do with me.

Mr. Carter: I am pleased to repeat what I have said on other occasions. The hon. Gentleman reminded me on Friday in the course of an Adjournment debate that I had absolved him from complicity or involvement in the collapse of V & G. However, I know he will accept responsibility for the letter to which I have just referred.
The opening words stem from a statement by the then Secretary of State for Employment. I had raised the possibility of a collapse of an insurance company. It was a premonition which came true.
The hon. Gentleman wrote:
Where there is competition there is the most effective means of safeguarding the consumer and the less it is interfered with the better … I remain of the view that the motor insurance market is competitive.
That represents an enormous turn-round for this Government, especially for the hon. Gentleman, and I wonder whether he will tell us that that is now an operative statement.

Mr. Anthony Grant: Perhaps I ought to intervene now. The hon. Gentleman has said that he will be leaving very soon. I think it would have been fairer if he had said that what prompted his communication to my Department was not the collapse of a company but his complaint that premiums were going too high. In my reply I was pointing out that if we did what the hon. Gentleman wanted, which was to lower premiums artificially, that would probably precipitate a collapse.

Mr. Carter: At the time I suggested to the Board of Trade that an intention by the major motor insurance companies to raise their premiums indicated that their pressures on the smaller companies would be much greater. Therefore. I went on with statistics that I had obtained from research to prove—at least I thought I was proving—that there was the possibility of collapses taking place in such circumstances. Indeed, there was not just the one collapse there were a number.
I should like to go on to deal with the Bill—[Interruption.] Hon. Members may not like it when statements from the past come back to haunt them. There might


be one or two others later. Hon. Gentlemen must sharpen up the way that they approach the affairs of their Front Bench. Unfortunately, the Press does not spend overmuch time dealing with them. It would rather look to the Opposition Front Bench and the Labour Party for what we propose.
I assure the Treasury Bench that in matters of motor insurance we would act far more rigorously to protect policy holders than is being attempted in the Bill. More stringent controls are necessary, principally because, as the Minister admitted in opening the debate, the law compels the citizen to insure in many areas. With the passing of the Social Security Bill, this compulsion is increased even more. Not only does one need motor insurance and a whole variety of other insurances, but, by law, one now needs to be a member of an authorised pension scheme or to participate in a reserve scheme. So we are not dealing with a free market. By no stretch of the imagination is it free from the consumer's point of view. It is a tied and compelling market.
We need further controls to deal with the possibility of a collapse of the proportions of the V and G type. There is no doubt that the Bill does not ensure that that kind of thing will not happen again.
As was pointed out by my right hon. Friend the Member for Bristol, South-East, we need for greater efficiency in the insurance industry. We need to ensure that a more optimum form of structure and management control is brought about.
The hon. Member for Billericay pointed out that we need to deal with the way that insurance is sold. Many people are conned into buying insurance that they do not need. In many cases they go to brokers who are not controlled by law and charge extortionate rates for the selling of insurance policies. There is scope for a great deal of legislation regarding the way that insurance is sold to the consuming public.

Mr. MeCrindle: An insurance broker who sells a policy does not charge. He lives almost entirely on the commission that he receives from the life assurance companies.

Mr. Carter: That may be so. However, I assure the hon. Gentleman, from cases that I have handled, that brokers with whom I have come into contact charge a fee of their own.

Mr. McCrindle: I apologise for interrupting again. I suggest that the hon. Gentleman is confusing mortgage brokers with insurance brokers. Mortgage brokers make a charge, but insurance brokers do not because none has to be made.

Mr. Carter: I have dealt with cases where brokers have charged commission to clients who have obtained motor insurance from them. If the hon. Gentleman wants information on these cases I am willing to let him have it.
We should bear in mind that one-tenth of the gross national product now arises from insurance. It is probably the biggest single aspect of the GNP. It has grown in massive proportions over recent years. In my opinion, it has grown far too big. It is enormously influential. I wonder how much of the property boom—the enormous increase in house prices and land speculation in general over the past two years—has been due to insurance funds switching from one area of the economy into land, property, and so on.
No better area can be looked at to exemplify the inefficiency of certain sectors of the insurance industry than motor insurance. My right hon. Friend has already referred to the percentage of premium income that is devoted to expenses and commission. It amounts to between 30 per cent. and 45 per cent. on motor insurance. In many other instances it is far higher than that.
Motor insurance companies tell us "We are always making losses". I have examined the compiled accounts of the motor insurance companies for 1971. In that year there were reserves of £239,829,247. In that year there was a declared loss, but that was arrived at only in a book form because a certain percentage of the premium income was transferred to reserves. Subtracting the loss from the transfer to reserves results in a profit. It is the way that figures are presented that enables the motor insurance industry to say "We continually make an underwriting loss". There are enormous reserves in motor insurance.


In 1971 the figure was £239 million. It is probably about £300 million now.
The real beneficiaries of the profits on reserves are the shareholders. Basically, the Bill does absolutely nothing to change the structure—the real control—or to improve the basic rights of the policy holder, which, in many aspects of insurance, are to obtain a policy at the cheapest possible rate administered in the soundest possible way. Unfortunately, the insurance industry over many years has been, and continues to be, hostile to any form of intervention. Indeed, I am surprised that it has accepted so easily and readily the proposals contained in the Bill. During the passage of the Social Security Bill the week before last some hon. Members felt so guilty about the fact that the reserve scheme contributions could not be set against tax liability that they voted with the Opposition in an attempt to defeat the Government's proposals. I have no doubt that that aspect of that Bill was due substantially to the pressure of the insurance companies.
Again, we have the tremendously important fact that insurance is largely a captive market. We now have to insure against retirement. We must cover third-party risks when we drive. Indeed, one cannot get a mortgage unless one takes out insurance. There is a whole range of other forms of insurance where the law or the industry which operates that form of insurance compels. I believe that where the State compels it should seek not simply to control but to own and manage.
I believe that an incoming Labour Government will be forced to take far more stringent measures to secure the rights of policy holders over the whole range of insurance.
I end on one moral note. Insurance is concerned with misfortune or old age. Is it any longer right that a shareholder who has a stake in an insurance company should seek to make a profit out of the misfortune of another citizen? I do not believe that is right. We have said that it is wrong in many other spheres of insurance—sickness, injury, unemployment, and others. Sooner or later—I believe it will be sooner—the next Labour Government will have to turn their attention and minds to ensuring that policy holders have the same rights

as in so many other spheres where the State has decided to intervene.

8.20 p.m.

Mr. Roger Moate: The hon. Member for Birmingham, Northfield (Mr. Carter) said that he was going to refer to the Bill. Actually he never quite made it, which is a pity, because that might have led to a few more factual statements than some of the inaccuracies and exaggerations into which he allowed himself to be tempted.
I think it is quite wrong of the hon. Member to pretend that, because he has had a letter from a Minister stating that he believes the best protection for the consumer in motor insurance premiums is competition, that somehow represents a major change in the Bill. The two things are utterly different. If the hon. Member examines the Bill he will find that there is no clause saying that we intend to control motor insurance premiums. That is totally different and he is misleading the House and the public if he puts that forward.
The right hon. Member for Bristol, South-East (Mr. Benn) was also guilty of gross exaggeration and misunderstanding of the Bill. There is no difference in the basic philosophy of this and previous insurance Bills. It has always been understood that insurance was subject to different considerations from other commercial enterprises. I do not remember the exact date, but insurance legislation dates back as far as the eighteenth century. The insurance industry and the public have always accepted that there were special considerations in introducing legislation to protect policy holders in this very special field.
The right hon. Gentleman tried to make out that the Bill represented a substantial increase in powers as compared with the 1967 Act. I do not believe that to be true. He based most of his argument on the fact that The Times had said that this was a watershed. That is an unlikely combination—The Times and the right hon. Gentleman—at the present time. But I do not think it makes the exaggeration any less untrue.
If the right hon. Gentleman examines the legislation carefully, he will find that in almost every case the powers existed under the previous Act. They have been


clarified and defined, and in certain respects they have been extended. But I do not think he has read the Bill very carefully if he puts this forward as a major expansion of the Government's interventionist powers. It is not like that, and I think he will realise it when this matter is studied more closely in Committee.
In particular—I believe that my interpretation is right, but I should appreciate confirmation from the Minister—the right hon. Gentleman said that Clauses 13 to 21, which give powers of control over investment and so on, were a great expansion of power over the rights of insurance companies. He said that Clause 14 allowed the Government to prescribe the investments a company could not make and would allow a future Labour Government to say that a company could not invest in South Africa.
As I understand it, however, Clauses 13 to 21 are bound by Clause 12. If the right hon. Gentleman looks at that clause, he will see that it states quite clearly that
Any power conferred … by sections 13 to 21 below shall be exercisable in relation to any insurance company …
and that this only applies where it is the Secretary of State's view that
… the company may be unable to meet its liabilities or, in the case of long term business, to fulfil the reasonable expectations of policyholders".
Therefore, these powers can be exercised only when there are doubts about a company. This is eminently reasonable. It is based on the same philosophy as the 1967 Act.
The right hon. Gentleman also went on with what I consider to be quite irrelevant to the Bill—the usual arguments from the Labour Party about nationalisation or an extension of State participation in existing companies. If he is trying to do a disservice to this country, he can best do it by continuing to talk like that.
We have heard that the British insurance industry earns something like £400 million net a year. It is the largest single contributor to our invisible earnings. Its investment is something like £18,000 million and its overseas gross earnings are massive. Britain is the largest single

insurance centre in the world. This position has been created not by State backing but because it has been a free enterprise system, because the State has been enlightened, under both Conservative and Labour administrations, and has allowed the companies to remain unfettered by State interference in such things as policy wording, investment policy and so on. Other countries have succumbed to the temptation of imposing State control. That is why they have fairly small national insurance industries, whereas we have a very great one, of which we should be proud.
In some ways one does not mind the right hon. Gentleman talking as he does, because it is the sort of talk that will ensure a Conservative victory in the next election. But I hope that in the interests of responsible government he will drop some of his more exaggerated talk, because it will damage the industry.
I welcome the Bill, because it avoids the worst pitfalls and the more alarmist ideas that were going round in the post-V and G period—ideas about extending compulsory third party insurance to property damage, which is totally irrelevant to the problems we have been faced with in recent years, and ideas about having larger mutual funds between the various companies, which would have given a blank cheque to the irresponsible underwriter. It has avoided this and some of the State intervention ideas of the Labour Party. To that extent I welcome the Bill. I welcome it also in that it extends the past policy of successive Governments in insurance company legislation. It gives increased powers to monitor insurance companies, increased powers of intervention if a company is seen to be in difficulties, and certainly increased powers to prevent a company from getting into difficulties. In all these respects I think it is something that the whole insurance industry welcomes and the whole country should welcome. To that extent, it is a very sensible and helpful Bill, and I think it will have a very helpful and constructive Committee stage.
To a certain extent, however, I am disappointed by the fact that the Government have rejected, without very convincing arguments, the idea of a separate insurance commissioner or registrar. A separate agency in the City was something which I and some of my hon. Friends put


forward. Indeed, the right hon. Member for Birkenhead (Mr. Dell) also put this idea forward. I believe this to be important, because somehow we have to establish a continuing system of close supervision by people who can manage to keep their fingers sensitively on the pulse of commercial life in the City of London.
I am not saving that the Department of Trade and Industry is not carrying out its functions under the insurance legislation with great efficiency. I believe that it is and I take this opportunity of saying so. There were very severe criticisms when Vehicle and General collapsed. I made some of them in this House, and perhaps I should at this stage declare an interest as an insurance broker. Since that time I have heard more compliments than criticisms about the Department of Trade and Industry. Whereas people were very bitter in their comments at that time about a lack of understanding and commercial awareness, it is now said that there is great understanding of the problems that exist and a far greater comprehension of and closeness to City thinking. This is very much to the credit of those concerned.
Also, there is no doubt that the Government's recent approach to dubious insurance companies has been a positive one. A relatively large number of companies has been stopped altogether from writing insurance business. One or two new companies have not received authorisations to write insurance business. New companies have been strictly controlled, premiums watched and separate funds set up. All these things suggest to me that the DTI is now aware of its powers. That is a good thing, but it also confirms what I said earlier about the wide powers which exist under previous legislation.
Many of the things that are proposed in the Bill—more clearly, perhaps, than before—existed under the 1967 Act. The Government have been exercising those powers in much the same way under existing legislation. One could say that, if the present attitudes and policies of the Government had been followed at the time of the Vehicle and General collapse, that collapse would not have occurred. That is perhaps an argument about locking the stable door when the horse has bolted, but it clearly shows that the powers exist

and that this Bill does not go mach further. One could almost take that as a criticism. We cannot be complacent that this legislation will do the job 100 per cent.
As the Minister said, there is no guarantee against company failures. Just because scrutiny is much tigher, we should not imagine that some companies will not get through the loopholes. The situation in the insurance world today is changing more rapidly than ever before. It is becoming more international, more mergers are taking place, new companies from overseas are participating more in the London market and inflation is increasing premiums so rapidly that many new companies are now writing a volume of premium income, if not of policy holders, which would make the Vehicle and General rate of growth look modest.
We have had the Equity Funding example in the United States to show what a determined group can do if it is prepared to ignore the law. So we must ensure that, in future, we do not have to come back for even more stringent legislation. That is one of the reasons why I have always pressed for the appointment of an insurance commissioner in the City, backed up by professional staff, in close touch with companies and brokers and probably more familiar with the commercial facts of life.
I have some criticisms of the Bill, many of which are Committee points and can be left until then. First, there was an extensive debate in another place about the "blackball" clause, the great power of the Department to prevent a controller of an insurance company from receiving an authorisation to carry on his insurance business. In brief, I understand that, under the 1967 Act it was not necessary to give reasons for declining such authorisation to newcomers, although it was necessary to extend information to persons who were already in the industry, already controllers.
The Minister said that the argument was that new entrants had fewer rights than sitting tenants. It is interesting that that same distinction has been disallowed in regard to this Bill. Whereas there was a distinction between a 1958 Act company and a subsequently-established company, it was made clear in another place that this distinction was felt to be invalid and unjustified. I am not sure that it


is logical or equitable to say that, because a person has already secured his position, he should have so many more rights than a newcomer who is making an application.
It wonder whether the Government are not taking a sledgehammer to crack a nut. They have considerable powers to control a new insurance entrant. They can control his premium income, the volume of premiums and the classes of business written. If there was someone about whom they were so dubious that they dare not even say what the reasons were for not allowing him to control an insurance company, I believe that they could control him totally or even control him out of existence, if he were that dubious. I do not like these powers and I hope that we shall be able to examine them in Committee, although I appreciate that they have been exhaustively examined elsewhere.
A further major criticism of mine is that in so many clauses we do not know what we are debating, simply because we are told that the matter will be subject to regulations to be issued later. Under so many clauses—

Mr. Bruce Milan: Almost every one.

Mr. Moate: "Almost every one," the hon. Gentleman says—we do not know what the powers will be.
A reasonable argument which is put forward so often for regulations is that this system allows a matter to be discussed with the industry. The important thing is that it should be discussed in the House of Commons. Another reason adduced for their saying that it is subject to regulations is not because the Government are anxious to discuss it with the industry but simply that the Government do not know how to draw up the regulations. In some cases it is quite impracticable even to consider implementing such proposals.
There are a number of clauses to which we must come back in Committee, particularly Clause 41 about insurance advertisements. Hon. Members may say that it is a good thing to control exaggerated advertisements. I do not disagree with that in principle, but I am not sure that it should come into the Bill in this

way, because many other forms of financial advertising should perhaps be controlled and, if we are to take steps to control financial advertising, that is a major principle which should be debated on separate legislation for consumer protection. To have it in the form that "regulations may be made" with nothing stated about the purpose is undesirable.
Clause 42 states that
Regulations may be made for requiring any person who invites another person to make an offer … to furnish with the invitation such information with respect to
his insurance connections. In other words, if a company owns a broker or a broker owns a company, that information should be declared. This arose because the Vehicle and General Insurance Company owned a firm of brokers, and clients of those brokers did not know that the business was being passed to the parent company of that firm of brokers. One can see that that is undesirable, but some of our largest insurance broking institutions own companies together with a large number of underwriting interests. It will be quite impractable, with the best will in the world, to see that such information is divulged.
Although I welcome the Bill very much, I think there is immense scope for its improvement and I hope that a number of amendments will be tabled. I look forward to our having very constructive, albeit brief, debates and a constructive Committee stage.

8.37 p.m.

Mr. Joseph Ashton: I shall not attempt to go into the detail that the hon. Member for Faversham (Mr. Moate) did. I was glad that he mentioned one matter and said that he had an interest in it, and I was also glad that he spoke about consumer protection. Although there are 51 clauses in the Bill and I have looked at them closely, I have not found any reference to an individual consumer having the right to make a protest. That is not mentioned and may have been deliberately excluded. It seems that when there is a big crash like that of V and G, the newspapers take an interest, there is a tremendous scandal and the Department steps in, but every day of the week some little consumer is having an argument with an insurance company about what his policy covers.
I had a case in my constituency two years ago which made me take an interest in this subject. A lady woke up one morning and found her house had literally broken in half. She was naturally very perturbed because the house was extremely dangerous. She was not unduly worried about the money problem because she thought that the damage would be covered by her insurance through the building society. The building society said that it had nothing to do with it and she should see the insurance company. The insurance company looked at the policy and said that it would not pay out because the damage was due to a landslip. This had happened in a coalmining area, but no mining was taking place under her house. That was a pity, because in that case the National Coal Board would have assumed responsibility and would have paid cash compensation, but because the policy said "excluding landslip" she did not get a penny. She spent six months trying to fight the insurance company, owing £2,500 to the building society and lost her deposit. I took up the case with the Department of Trade and Industry, and the Department said there was nothing it could do. If it had been concerned with the Vehicle and General Insurance Company and affected 1 million householders the Department would have done something about it. In one case it could not do anything.
I did what any good Member does and put down a Question. The subject got on television and into the newspapers. I gave a few names, such as the Abbey National Building Society. There was instant pandemonium. First of all, the society said that it intended to alter its policy to cover landslip as from 1st January next. It could not back-date that to the existing policy. So I went on radio and television again and had a bit more fun, and this lady did her bit by shedding a few more tears on television. It was not doing the insurance company any good, so it came along and said that it had revised its attitude towards the case and would make an ex gratia payment. That had been going on for six months until a Member of Parliament took it up.
There must be many more cases in which a person does not know what to do or how to manipulate the media. Some poor old lady finds that a policy for which she has been paying a few coppers

all her life has some exclusion in it which stops her getting money. She is not in a position to take the company to court. The insurance companies can lay down their own rules and regulations. I do not see that the Bill does anything to stop this. If a Member raises something a Minister says to the companies "This practice is not good enough; it is time that it stopped". It may be that the Minister says to the insurance companies "You have to revise your policies". But he does nothing to rectify what has happened in the past. The poor policy holder is still standing there.
Someone told me after the incident I have mentioned that the insurance companies have some form of appeals committee before which an individual can object to a standard practice. If they do, no one ever tells the policy holder. The companies keep very quiet about it.
The situation about existing motor insurance policies is a national scandal and disgrace. A new development has taken place in motor insurance in the last five years as a result of the breathalyser. We have now reached the state where a man convicted of a breathalyser offence is not only punished by the courts but severely punished by the insurance companies too. Often he will be damned lucky if he can get insurance at all.
Let us consider a man driving down a road with perhaps 85 millilitres of alcohol in his blood. He may not be involved in an accident; he may be driving perfectly correctly. He is pulled up by the police, perhaps because his near number plate light is not working. The police then smell his breath. I know that this may sound hypothetical but it has happened many times. That man is convicted on a breathalyser charge. When he next has to renew his insurance he will find that his premium has risen to perhaps £100 or £150 and that there is a clause which says that the company will not pay the first £100. A double punishment is inflicted upon him. If this man has been involved in an accident and has wrapped his car round a lamppost he may find that he cannot get any insurance at all. We are reaching the point where the State says that the driver must be insured, and then it washes its hands on the matter unless something like V and G comes long. The


State is not interested in the administrative operations of small companies.
Nothing causes more anger among motorists than the "no blame" or "no claim" bonus and the "knock for knock" agreement with insurance companies. A man may have his car parked at the side of the road and another runs into it. If he then makes a claim thinking that it will not affect his premium, it is pointed out that it is not a "no blame" bonus but a "no claim" bonus. He has to fight the insurance company all the way. In any kind of accident it is very often 80 per cent. fault one way and 20 per cent. the other. There is nothing in the Bill about any kind of tribunal or redress for the consumer.
There is a form of nationalised motor insurance in Saskatchewan which operates very well. The rate of increase of premium is not fantastic because of nationalisation. It has already been pointed out that administrative costs of running nationalised insurance would be lower than private insurance costs because of the waste involved in competition and in the operation of small companies and so on. With this nationalised system in Saskatchewan there is an independent tribunal, rather like the independent tribunal in national insurance affairs which deals with cases such as that which can arise when a man says that he has been made redundant and his boss says that he has not. It does not cost him a penny. He goes there to have his case heard. There is no court, nobody wears a wig and there are no lawyers. A three-man tribunal deals with national insurance matters. A miner who wants to make a disability claim can go before a tribunal. The decision is made fairly, and it is acceptable to both sides.
There is nothing like that for dealing with private insurance companies. What is more, they do not want anything like that. They prefer the existing, "no blame, no claim" system under which each insurance company stands its own knocks. That is not good enough in what has been one of the most rapid growth industries in this country over the last 10 years.
The average motorist is totally dissatisfied with the present system. It is no good saying that he keeps on insuring his

car and, therefore, he must be satisfied with the system. The plain fact is that he has no option in the matter. I hope that when the Bill is considered line by line in Committee we shall be able to write into it some clauses which will considerably strengthen its powers.
It is a disgrace that the AA and the RAC have never tackled the problem. They have advice bureaux, but on their boards there are agents of powerful insurance companies who do not want the kind of provisions about which I have spoken written into the Bill. The voice of the motorist is a voice in the wilderness, and the sooner there is a consumer protection tribunal to help not only motorists but those with life insurance and pension scheme problems the better it will be.
If somebody has paid his contributions to a works pension scheme and then does not get the full amount to which he is entitled, he should have the right to appeal not to the Minister but to an independent assessor. I hope that we shall write that provision into the Bill in Committee.

8.47 p.m.

Mr. Nicholas Edwards: My interest as one engaged in insurance is well known to the House, but I declare it again. As a practising broker, I have some sympathy with some of the things said by the hon. Member for Bassetlaw (Mr. Ashton) about the need for some independent body to which cases of dispute may be referred.
The hon. Gentleman and two of his hon. Friends compared the cost of private insurance with the cost of running the National Insurance Scheme. When speaking about the private insurance company, the hon. Member for Birmingham, Northfield (Mr. Carter), said that the case depended on the way in which figures are presented. It seems to me that this is a case of the way in which the figures are presented, because the proponents of the argument ignore the real cost of the services provided by the Post Office or other Government Departments in selling the policies and dealing with the customers' inquiries—that is if they are qualified to deal with them.
The argument also ignores the fact that the National Insurance Scheme largely takes the form of a poll tax. It


involves no adjustment of premiums to risk. It ignores the cost that falls on employers in making deductions from employees' wages. It is a misleading argument.
I am sorry that the hon. Member for Northfield could not remain to continue a debate that we recently had at Lloyd's. On that occasion, when he suggested it was wrong that people should make a profit out of other people's misfortunes someone asked whether it would be the policy of the Labour Government to nationalise undertaking.
The right hon. Member for Bristol, South-East (Mr. Benn) skirted rather delicately round the question of nationalisation. We heard a passionate speech about the evils of intervention and of sweeping powers. There is a major difference between the powers in the Bill, which are an enlargement of the powers in the 1967 Act, and powers taken in many other countries, in that they do not involve direct interference in the rating and management of insurance companies themselves and the terms and conditions which they lay down.

Mr. Benn: I hope that the hon. Gentleman, before he concludes that passage, will not allow the House to reach the conclusion that I made a passionate speech denouncing the sweeping powers. I recommend the Bill to the House more warmly than did his right hon. and learned Friend.

Mr. Edwards: I am glad that the right hon. Gentleman intervened to make that point. It rather strengthens the point I am going on to make, which is that already in the debate the lines of political battle have been drawn between those on this side who would like to see the insurance industry continuing to operate within the traditional framework based upon freedom with publicity which has enabled it to obtain its present preeminent place in the international insurance market and those on the other side who want it to be tightly controlled or even nationalised.
On the one hand, there is the philosophy expressed with great clarity in a recent address by Mr. Peck, Deputy Secretary of the Department of Trade and Industry, at the World Insurance Conference, when he said:

the United Kingdom have adopted what one might call a medium level of distortion of market forces—that is to say, one which we think will give the policy holder a reasonable measure of protection without so regulating the affairs of the industry as to deprive the country (including of course policy holders) of the benefit which can be provided by the play of the market—the earnings of foreign exchange, the need for innovation and for the successful introduction of new methods—and the need for an appropriate measure of competition".

Mr. Benn: Much greater freedom is given to civil servants to make public speeches now than used to be the case. I greatly welcome that. A speech made by a civil servant reflects the policy of the Minister whom he serves. It would not be important, nor would it he fair to the civil servant concerned, to call that speech in aid of a particular policy at any time, because the same civil servant under another administration would present another point of view. Though it is fair to quote the civil servant in aid of his Minister, it is not fair to quote the civil servant in any debate on one side of a great divide. He is a public servant saying what is the policy of the Government of the day.

Mr. Edwards: I was not saying that Mr. Peck was on one side of the divide or the other. I was saying that he was making a statement of the philosophy and making it at a public gathering where the speeches were fully reported in the Press.
On the other side, there are the arguments of the hon. Member for Bristol, South-East and those who want to see not only direct management interference and rating control to safeguard policy holders but also a publicly owned insurance industry, in whole or in part—
as a basic necessity for the establishment of a Socialist society".
Those are the words of the proposer of the motion to nationalise various undertakings at the 1971 Labour Party conference, who demanded what she called
the biggest single step towards possible socialism in Britain
What is at stake in considering these divergent approaches is not just the policy holders, important though their interests are. What is at stake is the £380 million which the insurance companies contributed to our overseas earnings in 1971 and which they will no


doubt continue to contribute if they maintain a reasonable level of freedom.
It is worth reminding the House that Article IV, Section 40(9) of the New York insurance law forbids any insurer, directly owned or controlled by a foreign Government, in whole or in part, from doing business in the State of New York. Similar prohibitions exist in 28 other States of the United States of America.
It is not only our foreign earnings that would be prejudiced if we abandoned the principle of freedom with publicity that is the basis of the Bill and replaced it with direct State ownership or control. I believe that the consumer would suffer as well. While on the one hand through State ownership he would gain security against financial collapse, the premium he would pay for that security would be very high. He would lose first the freedom of choice, and choice is perhaps one of the most fundamental of all our freedoms. It means that if someone does not like the way he is treated he can go somewhere else. It means if he cannot get what he wants from one organisation he can go to someone else who can give it, and it means that a monopoly is not free to set any rate it chooses but that there is competition, innovation and change.
However, some hon. Members on the Labour side have taken a more modest course. They merely advocate that we move towards the Continental system of direct supervision of rates and terms. Perhaps I could answer that argument with two examples of recent years. First, I do not believe that we would have seen the enormous innovations that have characterised the market in, say, liability business or the insurance of contractors' risks. Secondly, I do not believe that with that system the market would have maintained as it has in London, but nowhere else in the world, a market for the insurance of drilling rigs after the disastrous experience of the early 1950s and the 1960s.
Innovation, flexibility, competition, and worldwide dominance should not lightly be put at risk, and at the same time, the individual deserves protection against abuse. The Bill should be judged by whether it achieves these twin objectives.

In another place the debate concentrated upon the sanctity of natural justice, and noble Lords spent much time seeking to protect the individual manager and controller against victimisation by the State. It was right that that great principle should be thoroughly debated, but I suspect that in this House and in Committee here the debates will concentrate more on whether there is adequate protection for the policy holder. Inevitably, we are involved in making valued judgments. Our task is to judge whether the Government have the right balance between maintenance of essential freedoms and the security of the customer.
I want to turn to some specific aspects of the Bill. It has already been much improved in another place. Some hon. Members will still object to what have been called the "fit and proper persons" or blackball clauses. I believe that we are not now very far off target. Anyone with experience of the industry will know that there are individuals who should be kept out. The Government must effectively command powers to see that they are. Amendments have made sure that a change of director other than a managing director no longer requires prior approval and changes of individual directors will no longer lead to Clause 12 powers of intervention. We are back to the status quo of the 1967 Act.
I welcome acceptance by the Government of the amendment moved by my noble Friend Lord Aldington, which deleted the provision in the original Clause 3 which would have prevented the creation of new composite companies. Another notable improvement is the tightening up of Clause 6, which originally gave the Secretary of State power to require registration of any kind of agreement. Now he must be satisfied that such an agreement is likely to be undesirable in the interests of policy holders.
Having praised some of the improvement, I must now criticise. There is concern in the industry about Clause 5, which enables the Secretary of State to publish any documents deposited with him in any way that he feels appropriate, and that would include the right to publish short-term statistics or other specific information. The problem is that short-term statistics in the insurance industry


can be as misleading as short-term balance of payments statistics. Publication of insurance quarterly figures can do irreparable damage in the hands of financial commentators who misjudge them. The Government will say that the right to publish all information obtained is the basis of the whole strategy of freedom with publicity and that they have the power to withhold information which might be damaging. They will tell us that the information that can be asked for is to be defined in regulations, one of the many instances in the Bill when we shall have to rely on regulations yet to be published and about which we know nothing. That is clearly a matter that will have to be examined again in Committee.
More important from my point of view are the objections to Clause 11, which the Government suddenly introduced on Report in another place and which received totally inadequate debate. The clause renders void any contract for an unlimited amount except where such a contract is specifically permitted by regulations. It was introduced to fill a loophole through which one company might guarantee an associated company. My noble Friend cited the case of a life company guaranteeing an ailing associated motor company.
In a letter to the Lloyd's Insurance Brokers' Association on 16th May, the Department described the loophole in these terms:
there is at present nothing in principle to prevent an insurance company undertaking without the Department's knowledge a contract or guarantee for an unspecified amount which is excessive in relation to its capacity. For example, an insurance company might be asked to guarantee a loan to, or some contingent obligation of, a non-insurance company in a group of which both are member companies. We may come to consider that the arrangement puts the insurance company's solvency in question".
To meet that particular, narrow situation, the Government propose to take wide-ranging and ill-defined powers, depending on regulations as yet unknown.
My noble Friend Lord Limerick used a strange phrase in defending that clause. He said that the Department wanted industry to tell it the types of unlimited guarantee which were prima facie rather a strange thing for a company to do but were nevertheless right and proper in the ordinary course of business. The

phrase "which are prima facie rather a strange thing for a company to do" seems to reveal a disturbing ignorance of the market by Government.
Whether the Minister likes it or not, unlimited liability contracts have always been part of the bread and butter business of the industry, and it will be very hard by regulation to define and give permission for contracts not just in this country but in every country where the British insurance industry does business. It will be a formidable task, embracing motor insurance in at least a dozen countries—employers' liability in many parts of the world, general third-party business in almost all countries, workmen's compensation in Australia, and, perhaps most serious and difficult to define, a very large proportion of quota share in stop loss reinsurance contracts.
It is not tolerable that an underwriter operating in a world market should be put into the position of saying "I am sorry. This is good business. I would like to write it. But it does not appear in the regulations. The Minister thinks it is prima facie a strange thing to be doing. I cannot help you."
The Government feel that they have found a loophole. It should be closed by shutting a specific gate and not by taking huge restrictive and unnecessary powers. The Government have a duty to take only the specific powers they need. The House has a duty to say "No" when the Government ask for too much.
I have three things to say in conclusion. First, I do not go along with those who object to the principle of random inspections. I strongly support that principle, which will make possible a thorough look at the doubtful without creating panic, and reveal flaws where none was thought to exist. It may well act as a deterrent to practices that would otherwise be attempted.
Secondly, I welcome the Government's statement that they will add new clauses to implement Chapters 6 and 7 of the Scott Report, the first of which deals with valuations and the treatment of assets and the second with the cooling-off period and the provision of information to policy holders.
Thirdly, the effectiveness of the Bill depends more than anything else on the


way in which the Department implements it. In the past the Department has been woefully weak and understaffed in many respects. Now it has been strengthened. I join in paying tribute to what is generally felt to be a great improvement, though it will have to be strengthened still further. But more important than numerical strength and knowledge is the political will and practical good sense that inspires it.
The House is giving the Minister and the Department immense and unprecedented powers. Armed with those powers, they cannot evade responsibility. It is a very heavy burden that my right hon. and learned Friend is now accepting.

9.5 p.m.

Mr. Peter Rost: I hesitate to intervene because I cannot claim to be directly involved in the insurance business as are some of my hon. Friends who have spoken. However, as a stockbroker I spent nearly all my working life helping and guiding insurance companies in their investment policies.
I regret that this legislation is necessary. I should have preferred to see the insurance industry finding a way of putting its house in order and providing its own disciplinary methods with which to control the industry. The British Insurance Association maintains that it has no power to investigate its members and that it has no real power. That is open to question, as it has the power to reject members and to expel. By adverse publicity it has a powerful force to effect some discipline on its members. Nevertheless, it appears that the industry has not found a way, or has preferred not to find a way, of correcting faults which have come to light in recent years. Therefore, the Government have had no alternative but to bring forward this legislation. Nevertheless, I regret that it has not been found possible to reach an alternative solution.
This legislation having now come forward, there are two areas which must be examined carefully. The first area is investment policies. There are several clauses which, for obvious reasons, and in order to protect the consumer over a wide range of insurance, seek to protect the Government by giving them power to

intervene with fairly restrictive measures. I hope that those powers, if they are to be used, will be used sensibly and not with the heavy hand which is sometimes used by Government Departments when they decide to intervene.
The insurance companies are a major force in the investment scene. They are a major contributor to our free enterprise capital markets. Through the premium funds which are invested mostly through the Stock Exchange, insurance companies are a major institutional investor and provide a large proportion of capital which the industry badly needs. Some of that capital is, of course, provided through new issues. Nevertheless, the insurance companies are a major force in helping industry through the free enterprise system to develop, thus helping the economy to grow and expand.
Therefore, I think it very important that no unreasonable restrictions should be applied to the insurance companies' investment managements, because it is through their skilful investment policies in the past and at present, through their shrewd application of premium funds and surpluses and retained profits, that the industry has grown as it has in this country. If this freedom is fettered too much, if the abilities of the investment managers of our insurance industry are restrained too much, I have no doubt that the industry as a whole will suffer; profits will not grow as they should and the industry will not be able to expand and take full advantage of the important world markets open to it.
If restrictive investment policies were to be applied, it would damage the whole economy as well as affecting the invisible earnings, which have grown at a very good rate through the shrewd investments of the insurance companies. That is the second point on which I have reservations. I hope we shall be reassured that the powers which the Government are seeking will not unduly restrict the investment policies of the insurance companies.
Thirdly, there is the possible restriction of competition in the industry. One wonders whether there is not some risk that in providing consumer protection in the Bill we are in danger of an overkill. What we must not allow to happen is the restraining and restricting of new entrants into the insurance business.


British insurance has grown to its present size and world dominance because it has been a free enterprise industry, with new entrants being encouraged and allowed to grow and prosper. Although we all agree that we have to have safeguards, we must ensure that competition in the industry for new companies to he allowed to enter, with due safeguards, and to be able to grow will not be unduly restrained.
Although I support the Bill and regard it as necessary, I regret that it is necessary. I would prefer the industry to have made more of an effort to put its own house in order. I hope that the Bill will not unreasonably restrict the industry, particularly its aggressive, successful and skilful investment policies, and that it will not stifle or restrict the growth of the industry by unduly restraining the development of new enterprise.

9.14 p.m.

Mr. Bruce Milan: As has been made clear, the Opposition welcome the Bill. Taken as a whole, it represents another massive dose of interventionism by the Government in the economy. It follows the pattern we have become familiar with through the Industry Act, the Fair Trading Bill and the company law reform which we are to get in the next Session. The Government, elected to power on the basis that they would remove the shackles from private industry and free enterprise and allow them to get on with the job, are introducing successive measures which represent governmental power to intervene in a way which would have been almost unthinkable only five or even two year ago. Nevertheless, we welcome the Bill very much. We welcome it especially because it represents another nail in the coffin of non-interventionism by the present Government.
Why do we need regulation of the insurance industry? The first and most obvious reason is that there are literally millions of policy holders who have an interest in the way in which the industry is run. The fact is added to by the point, which has been made by a number of hon. Members, that there are certain circumstances, particularly in motor insurance, in which there are statutory requirements for insurance. In addition to that, however, there is a general en-

couragement to people to enter into assurance for reasons of prudence. It is generally reckoned to be a good, desirable and prudent thing for ordinary citizens to have life assurance cover. People are encouraged to insure their houses and other property. The special place of assurance as a means of saving is recognised by the many tax advantages which life assurance has in our taxation system, some of which are unjustified.
It is not unexpected, therefore, that many people feel that, when they enter into a contract of assurance or insurance, there is a certain security or safety about it which is not available to them in any other ordinary commercial transactions. They expect insurance to be absolutely safe. As we see when a major collapse of an insurance company occurs, be it V and G or any other company, many ordinary policy holders feel that they have been let down not only by the company concerned but also by the Government. People feel that in an important matter of this sort, where the whole basis of the contract ought to be safety and security, the Government have special responsibilities for seeing that policy holders are protected.
Unfortunately, the ordinary forces of competition, in which the Government apparently believed at one time, not only do not produce safety and security for the policy holder but in certain circumstances produce the very opposite, because cut-price insurance rates are in many cases a prescription for disaster. They are a prescription for disaster not only for the company but for the unfortunate people who take out policies with it.
When one adds to that the fact that in the insurance business potentially large sums of money can be attracted and are available for investment or otherwise by the insurance companies, it is not unexpected that insurance attracts not only a certain proportion of irresponsible people but also a certain number of people who are simply rogues and crooks. Therefore, our legislation has to be drafted having in mind not only those who will run their business in a perfectly honourable and responsible way but also the irresponsible elements in the industry and the literally crooked elements as well.
Other aspects of the insurance industry make it particularly worthy of our attention. The very large profits that some of the major companies make, as my right hon. Friend the Member for Bristol, South-East (Mr. Benn) pointed out, and the influence of the insurance companies in the stock market, in general investment, in overseas earnings and so on, are wider issues which are not raised directly by the Bill. We shall wish to return to some of them in Committee. We shall then have an opportunity of debating at greater length than we have been able to do this evening the point of view held by my right hon. and hon. Friends and myself that there is a very strong case for a larger element of public enterprise and ownership within the insurance industry, particularly in those areas where there is a statutory requirement to insure. No doubt we shall return to those points at later stages of the Bill.
If it is agreed—and I think that it is generally agreed—that there has to be regulation of the insurance industry, the question arises of what the regulatory agency should be. The hon. Member for Derbyshire, South-East (Mr. Rost) was the first speaker in the debate to mention the possibility of self-policing by the industry itself. It is remarkable that this was mentioned only by him, because at one time there was a good deal of support in the Conservative Party for the idea that the industry should manage its own affairs, just as the Take-over Panel is meant to manage certain other operations in the City. This attitude is not only wrong and inappropriate in the circumstances, but the industry has made clear that it has no wish to adopt that regulatory function. In fact it seemed to frighten the British Insurance Association when the suggestion was made to it that it might try to put its own house in order in a number of important respects.
In reading the Vehicle and General report I was impressed by the fact that when matters were coming to a crunch the British Insurance Association seemed to be more interested in impressing on the Government that it was not responsible for the losses than in doing anything else. The association did not come out of the matter very creditably. Therefore, the question of self-policing has

been set aside and the choice now is whether this should be done through the Government or through an outside agency.
I see arguments on both sides. In principle I am not greatly in favour of hiving off. There is much to be said for keeping many powers within Government Departments, but those powers must be used effectively. I shall come to that point a little later in my remarks.
There is a strong case for an insurance commissioner or some kind of outside body, and if, after this Bill is enacted, we find that the Department has not effectively exercised its powers under the legislation, there will be an overwhelming case for an insurance commissioner.
It is worth reminding ourselves that at the time of the 1967 legislation we were promised that things would be different, that the Department would work more effectively and all the rest of it. We are now being promised the same thing. It remains to be seen whether the Department will act more effectively.
There has been a tendency in legislation to provide for loopholes to be stopped up only after an event has caused a major scandal with very considerable losses to policy holders and others. Therefore, to some extent legislation has always been enacted with the aim of repairing damage which has been caused. We must hope that in this instance the powers sought by the Government in the Bill will prove to be adequate and will have sufficient flexibility and scope to prevent abuses arising in future. But it would be unrealistic to believe that this can be done by any Bill, and particularly by this Bill. Therefore, in principle I am not opposed to the idea that there should be very wide powers in the hands of the Department. However, I do not think that this is merely a question of adding in bits and pieces to the 1967 Act.
There are two differences in the Bill from what was enacted in the 1967 legislation. First, there are a certain number of additional powers in the Bill which were not available in the 1967 Act. Secondly, the 1967 provisions which are repeated in this Bill have been repeated with all the qualifying phrases and restraints on the use of these powers


removed. Therefore, the powers in the Bill are much less restrictive. In those circumstances, as the hon. Member for Faversham (Mr. Moate) said, we are entitled to know during the passage of the Bill what the Government intend to do about regulations on some of the major items covered by the Bill.
It is a feature of virtually every Bill introduced by the present Minister for Trade and Consumer Affairs that it is largely a statutory framework, leaving the details to be filled out by regulations. If we are to have government by regulation there is a very strong case for insisting that draft regulations should be available to hon. Members while the Bill is in Committee so that we have some idea of what the Government have in mind—always assuming that they know what they have in mind. On many of these matters we must be sceptical about that.
The powers are very substantial. There are powers over investment. There are powers over the kinds of business in which a company can involve itself. There are flexible powers on financial standards, including a definition of "solvency". In the light of the Vehicle and General case, I welcome them and believe them to be right, but again they need filling out in detail in Committee. Then there are powers about fit and proper persons which gave rise to controversy in the other place, where the Government made certain changes in the Bill's provisions. No doubt this is a matter we shall discuss at considerable length in Committee.
I simply make the point that, while I am mindful that we should not do anything in legislation which represents an injustice against an individual, and while in principle we ought always to provide that an individual should not only know the charges against him but have adequate opportunity to answer them, I see this as an extremely difficult area in which to operate. If we approach it with absolute standards of justice, though I am not sure that there is any such thing in any event, we are likely to miss the realities of the situation and produce a weakness in the powers which ultimately we may have cause to regret. That is my general approach. This, however, is a matter which we shall want to discuss at length in Committee. I shall approach it with an open mind.
The reforms concerned with long-term funds, especially life funds, are very much to be welcomed. In the case of long-term insurance there are a number of points that we shall want to probe in Committee. However, the Bill's provisions in this respect represent a considerable improvement on what we have at present.
I also welcome the powers for routine investigations of insurance companies. It came out vividly in the Vehicle and General case that an inhibiting factor in the Department was the feeling of civil servants that the investigatory powers were so special that they had to be used only in circumstances of such extreme suspicion that inevitably they brought about the collapse of the company concerned. If there is concern about a company, it should be possible to investigate it without necessarily bringing catastrophe in its wake. If we are to get to that situation, there must be investigations in circumstances where there is no suspicion at all but where it is simply a matter of the routine operation of the legislation by the Department.
There are a number of aspects of the present situation that we shall want to explore in Committee. I mention only one or two now. We shall want to look at the management expenses of different classes of insurance, especially in composite companies, and at the allocations between one part and the others. We shall want to give special consideration to that where there are holding and subsidiary companies involved, because this is a fruitful area for abuse at present.
We shall want to look at the recommendation of the Scott Committee for a cooling-off period.
Then there are the misleading advertisements and graphs giving forecasts of projections, where the selling point is to say "If the same happens during the next 10 or 20 years as has happened over the previous period"—that period being one which suits the advertiser—"there will be marvellous opportunities for you." Some of these forecasts and projections go on for 10 to 20 years, but the vast majority of people who take up these policies have policies which subsist in practice for less than 10 years. Therefore, many of the projections are completely false. We shall want to look at all these matters in Committee.
We shall want to look at the rôle not only of agents but of brokers. We shall want to look at the question whether we shall be introducing in a statutory way the principle of standard cover, which would obviate some of the difficulties that my hon. Friend the Member for Bassetlaw (Mr. Ashton) described so graphically in his constituency case. There are many other matters, some of great importance and others rather detailed, which we shall want to pursue in Committee.
I mention some of these matters to make the point that, although the Bill is apparently comprehensive and includes wide powers, it by no means covers everything of interest or importance in insurance. Therefore, there will be considerable scope in Committee to improve the Bill even further.
It is no using having this kind of lesgislation, however admirably it may be drafted and however impeccable the Government's intentions are at the time of its drafting, unless there is a real will in the Department to use it effectively. This is a lesson, above all others, that we must learn from the Vehicle and General affair. Reading that report, one could see how the Civil Service mind works in the kind of situation with which it was faced. There is a tendency to fall over backwards to be fair to a potentially defaulting company. There is an unwillingness to bring anything to the crunch. There is a tendency to put off the final decision by sending another letter, having another meeting, making another minute, and so on. There is also a great fear that if a wrong decision is made, first, damage may be done, and, secondly, some of the damage may ultimately redound to the disadvantage of the civil servants concerned.
One can see all that happening. It is very much the way that civil servants operate. Incidentally, that is why the report was so unfair to Mr. Jardine. He was only operating within the Civil Service mode of operation, within the Civil Service ethos. The idea that he should be singled out for criticism when obviously more senior officials were, and ought to have been, responsible for what was going on—for that matter, there was also ministerial responsibility—was grossly unfair to the civil servant concerned. This simply emphasises that the Department

must be not only more adequately staffed in numbers but staffed by better qualified people. That means bringing in from outside large numbers of people with a different and more tough attitude towards the kind of powers that will be given in this legislation.
I welcome any suggestion that, as has happened to a limited extent, outside experts, whether they be accountants, actuaries, or others, should be brought into the Department. We need an infusion of that outside expertise if there is to be any real prospect of getting the powers in this proposed legislation adequately performed.
I repeat, we support the Bill. We support the general approach of the Bill to intervene in this important industry. We think that there are many aspects in which the intervention does not go far enough, but we hope to improve upon those matters in Committee.

9.35 p.m.

The Under-Secretary of State for Trade and Industry (Mr. Anthony Grant): This relatively short debate has been helpful, and there have been valuable contributions from both sides. I welcome very much the general approval which has been given to this measure on both sides of the House. We recognise, of course, that many of the matters which have been raised are Committee matters, and as the hon. Member for Glasgow, Craigton (Mr. Milian) pointed out, so much of the detailed discussion will have to await that occasion. I welcome the approach of the hon. Member, and I look forward to seeing him in Committee. I will do my best now to answer some of the points which have been made.
I am bound to say that I find the contribution of the right hon. Member for Bristol, South-East (Mr. Benn) somewhat less attractive. He described the Bill as a watershed and, with rather splendid geological or geographical connotations, as a watershed of Himalayan proportions. But the true watershed as he should understand, was the 1967 Act itself.

Mr. Benn: I quoted The Times. I would not like to accept responsibility for the editor of The Times in any circumstances.

Mr. Grant: Error twice compounded: I accept that. The real watershed, as I


was saying, was the 1967 Act, which first gave my Department powers to intervene to forestall the failures. This Bill, and all the clauses in it to which the right hon. Gentleman referred, is in effect a follow-up of that Act, and a refinement of it. This is perfectly clear. What we have sought to do is not to have a great watershed or a revolution but, as my right hon. and learned Friend made clear, to improve upon and apply the experience gained from that statute, which was supported by this side of the House when in opposition. I think that should be put into perspective.
The main new powers, broadly speaking, which arise under this Bill are the powers of inspection in Clauses 12 and 3; the residual power in Clause 21; the important power to approve a proposed change of control, which is bottling up an important loophole, in Clauses 33 and 34; and the power to impose precautionary conditions following a change of control in Clause 12(4).

Mr. Nicholas Edwards: And Clause 11.

Mr. Grant: I will come to Clause 11 later.
Of course, the right hon. Gentleman was actually seeking to make his customary nationalisation speech. I think he was effectively demolished by my hon. Friends who have spoken. All of them made the point which we all understand and the public understands, that there is absolutely no evidence whatsoever that nationalisation of anything has ever reduced costs, improved services, or contributed anything to the wellbeing of the consumer or anyone else. The one thing, of course, that nationalisation has done is to make losses. In view of the right hon. Gentleman's strictures on the profits of some insurance companies, presumably that is why he approves of nationalisation: he wishes them to make losses.
A more serious indictment of the right hon. Gentleman's proposals—if they are proposals of his party—is the catastrophic effect they would have upon our overseas earnings. My hon. Friend the Member for Faversham (Mr. Moate), who has such wide experience of insurance, made this point absolutely clearly, and my right hon. and learned Friend said in

opening that of course some £360 million of foreign earnings come from our insurance industry.
It is interesting to point out that in New York State insurance legislation will not permit licences to be granted to any insurer owned or financially controlled, in whole or in part, by a foreign Government or a political sub-division of their agents. I believe that similar prohibitions exist in 28 other American States. This has to be seen against the position that British companies' premium income in the United States is about £600 million per annum. All this would be at risk if the proposal of the right hon. Gentleman were put into effect. But we are not at all certain whether it will be put into effect.
It is hard to discover the Labour Party's thinking on nationalisation. In the winter 1972–73 edition of Change, the quarterly magazine issued by the Federation of Insurance Brokers, there is an article by Mr. Terrence Pitt called "Labour and Insurance", in which he says:
Since the beginning of 1972, a study group under the Chairmanship of Mr. Ian Mikardo, M.P., has been considering how banking and insurance are to be nationalised. The study group hopes to report in April, 1973"—
it has not achieved that aim—
in the form of a 'green paper' for discussion by the Party as a whole.
He goes on:
The question that the study group has been examining is not whether, but how.
We do not know what will emerge from those discussions, but I profoundly hope that when the matter comes forward for discussion by the Shadow Cabinet the right hon. Member for Manchester, Cheetham (Mr. Harold Lever) will not have to leave his home again in order to bring sanity to the right hon. Member for Bristol, South-East. So much for the right hon. Member for Bristol, South-East.
The hon. Member for Birmingham, Northfield (Mr. Carter), who has taken an interest in insurance, particularly over the Vehicle and General affair, referred to a letter that I wrote, well before that episode, in reply to one of his, in the early days of this Parliament. This was also mentioned by the right hon. Member for Bristol, South-East.
I should like to make it clear that the letter which the hon. Member sent to my Department was complaining about increases in premiums by certain large companies, which he claimed were disadvantageous to the smaller companies. He complained particularly about the effect on the consumer and urged the Government to do something—no one knows quite what—to restrain or bring down those premiums.
I replied pointing out that the one thing that was almost certain to cause a crisis of solvency and lead to the kind of disasters which V and G demonstrated was for a Government artificially to bring down the premium. I do not resile for one moment from that letter, and I believe that what I said then is just as applicable today.
The hon. Member then sought to raise this matter before the V and G tribunal. The letter was considered by the tribunal, and anyone who reads its report will see that it was as perplexed as I have been to know precisely what the hon. Gentleman was getting at. To this day, I do not think that any of us really understands.
The right hon. Member for Bristol, South-East referred to the collapse of the Competitive Company. The Department does not accept the Parliamentary Commissioners' criticism. The prime, probably the only cause, of the collapse was the unwise capital expenditure on premises and on a computer in which the company engaged. The damage was done over only a short period of about four months, the company was under no duty to tell the Department of its intentions, and if it had its expectation would have been of substantially lower costs. It is unreasonable to suppose that this kind of development can be forestalled in every case, but the provisions of Clause 5 for more frequent returns should help a great deal.
My hon Friend the Member for Billericay (Mr. McCrindle), also bringing to the debate his personal experience and knowledge, referred to the Scott Committee's recommendation. I think that his object was to apply some of those recommendations more widely than just to linked life insurance. This possibility is not being overlooked in our consideration of the report and our consultations.
We shall be bringing forward, I hope in a later stage of the Bill, our conclusions in this respect.
My hon. Friend also mentioned, as did my hon. Friend the Member for Faversham, life insurance specialists in the Department. I agree entirely with them and others about the need for proper expertise inside the Department. I think I can assure the House that there has been a very considerable improvement in recent years. There is very adequate actuarial expertise provided by the Government Actuary, with whom my Department is in complete and constant touch. We shall be anxious to bring in outside expertise as much as possible, and I think we shall see a steady improvement in the Department.
My hon. Friend the Member for Faversham raised the question of hiving off and a separate agency. He and many other hon. Members have been properly appreciative of the improvement which has taken place in the DTI staff. Assuming that we get the improvement we all wish to have, it is difficult to see that a separate agency in the City could necessarily contribute much beyond what an improved staff using outside expertise could achieve. Overriding all this must be ministerial responsibility. If we preserve that, there could be a certain degree of duplication, but I am sure that we can consider this matter in future in relation to the Bill.
There was a complaint by some hon. Members that too much is left to regulations. I must point out that there are very complex and technical matters to be regulated and the regulations will be subject to the annulment procedure. Of course, there are advantages in allowing time to consider the details carefully within the broad framework of the legislation and also of permitting easier adjustments later. There are advantages in this approach which have been recognised over the years. Sometimes one gets better legislation by it than if one tries to enact the proposals in the legislation itself. In answer to the hon. Member for Craigton, although I cannot promise how much of the information will be available before the Committee and later stages, we shall do our best to be as forthcoming as possible consistent with the work we have to do.
In what I thought a very powerful speech, my hon. Friend the Member for Pembroke (Mr. Nicholas Edwards) raised the question of Clause 11. He has corresponded with me on this and I promise that he will get a reply. I recognise that we shall be able to pursue this matter in greater detail in Committee. It is fully recognised that a number of normal insurance contracts would be caught if they were not exempted by regulations. The clause will not come into effect until those regulations are made. There will be consultations with the industry as to what can be properly exempted. The purpose of the clause is to prohibit open-ended guarantees which are not normally within the ambit of insurance business. Clause 32 will provide guarantees to deter an evasion of the prohibition by setting the maximum at an astronomic level. We can pursue that further in detail in committee.
My hon. Friends the Members for Pembroke and Faversham referred to the debate in another place concerning the provisions for determining a "fit and proper person". As we have now presented the Bill, I think this matter commands broad support. I believe the House will generally recognise that we have done our best to respond to the criticisms which have been made about natural justice. The basic point we have reached is that for new applicants and in the case of change of control the provisions we have put forward are exactly the same as those contained in the 1967 Act.
We have provided for what might be called sitting tenants, people who are already in situ and have accepted the powerful plea made in another place that particulars should be given if they are ejected from their positions. It is one thing to deprive someone of his current way of livelihood but it is quite another to refuse entry to an industry from which the public expects the highest standards of competence and morality. To do what my hon. Friend wishes would be to put us back to the pre-1967 Act position, which I do not think would be possible.
I apologise if I have omitted many points. I can assure hon. Members that we will study all of them carefully and that there will be opportunity for debate in Committee. I believe that the public expects a high standard of protection in this complex matter. I believe that

it rejects the concept that there should be absolute freedom, and I do not think that my party has ever suggested that people should be left to the mercies of the sharks or the crooks. Equally I believe that the public rejects the monopoly or nationalisation proposal.
The concept of freedom with publicity represents the broad wishes of most people. This Bill represents an important step forward in consumer protection in what is a complicated but vital area. In an imperfect world it is impossible to guarantee 100 per cent. freedom from all risk if there is to be an efficient, effective and developing service to the public. The measures we are taking, built upon the experience gained after the 1967 Act, go a long way towards eliminating the unhappy failures of recent years while at the same time preserving the freedom of our insurance industry to maintain and increase its predominant position in world markets for the benefit of the British economy. Both the public and the industry can look to the future with greater confidence as a result of the Bill, which I now commend.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

Orders of the Day — INSURANCE COMPANIES [MONEY]

Queen's recommendation having been signified—

Resolved,
That, for the purposes of any Act of the present Session to amend the law relating to insurance companies and the carrying on of insurance business, it is expedient to authorise the payment out of moneys provided by Parliament of any expenses incurred under that Act by the Secretary of State.—[Sir G. Howe.]

Orders of the Day — TONGA (GIFT OF A TABLE)

9.52 p.m.

The Lord President of the Council and Leader of the House of Commons (Mr. James Prior): I beg to move,
That an humble Address be presented to Her Majesty praying that Her Majesty will give directions that there be presented on behalf


of this House a gift of a Table to the Legislative Assembly of the Kingdom of Tonga and assuring Her Majesty that this House will make good the expenses attending the same.
The gift to the Legislative Assembly of the Kingdom of Tonga follows the established and happy tradition that we send gifts from the House of Commons to other legislatures within the Commonwealth.
Hon. Members may recall that on 24th July 1970, in reply to a Question from the Leader of the Opposition, my right hon. Friend the Prime Minister undertook that Her Majesty's Government would in due course propose that the House should offer a gift to the Tongan Legislature. It is this undertaking which we are now pleased to honour. The King and the Legislative Assembly of Tonga have naturally been consulted and have welcomed the proposal to present a gift of a specially designed table.
If the House accepts the motion, as I am sure it will wish to do, arrangements will be made by you, Mr. Speaker, for a small delegation from the House to present the gift. We hope that the presentation can be made in September or October this year.
I therefore commend the motion to the House in the expectation that this will be accepted as an expression of our friendship and goodwill towards the Legislative Assembly of the Kingdom of Tonga.

9.55 p.m.

Mr. Tam Dalyell: Normally, on an occasion such as this I should never dream of introducing the proverbial fly into the ointment because these are, on the whole, felicitous occasions and should go through as smoothly as possible, but I cannot restrain myself from saying to the right hon. Gentleman and the Government that if they wanted this delegation to take a meaningful gift to the Kingdom of Tonga they should take not only a Table, which I am sure will be highly acceptable, but a message that the Government of Britain, whose protectorate Tonga was from 1900 to 1970 under the 1887 Treaty of Friendship, are doing their best, as members of the European Economic Community, to persuade the Government of France to restrain themselves from carrying out the proposed nuclear tests.
It is no good the Leader of the House looking wearily at his hon. Friends, because I have gone into this in some detail and the truth is that the Polynesian Islands and the 77,000 population of Tonga are as affected as anyone on the east coast of Fiji—

Mr. Speaker: Order. It is not a question of the Leader of the House looking wearily or warily at his hon. Friends. I think that I have a say in this. In my view it is quite improper on a motion of this sort to introduce a debate on nuclear tests in the Pacific.

Mr. Dalyell: As you know, Mr. Speaker, I always accept the rulings of the Chair, but I should have thought that on this occasion, when there is a question of a delegation going from this House to Tonga, it was legitimate to raise briefly and succinctly the issue that is at the forefront of our minds. We have the evidence of Linus Pauling, a double Nobel prizewinner, that there will be 1,700 casualties from nuclear fail-out in Australia, 1,500 resulting in death.

Mr. Speaker: Order. I think that the hon. Member is abusing the practice of the House. This is a formal and, I think, normally pleasant occasion, and I do not think it is fair to introduce a debate on nuclear tests in the Pacific. There are other opportunities for doing that. I think it is improper to do so on this occasion.

Mr. Dalyell: I should not like to damage the case in any way and not abide by your ruling, Mr. Speaker, but I excuse myself on the ground that normally I should never dream of using what should be a felicitous and uncontentious occasion to make a controversial point of this kind. On the other hand, the opinion of many people should be expressed. We expect the Government to take more action than has been forthcoming so far to protect the Polynesian people.
Finally, I come to what happened on Thursday. For months we have been told by the Government that the new tests were not harmful, and then we find that the Prime Minister—

Mr. Speaker: Order. I hope that the hon. Member will be good enough to be guided by me. He has stated his position and made the point. I hope that he will


now allow what is a formal and felicitous occasion to go on its way.

Mr. Dalyell: I accept your judgment, Mr. Speaker.

9.58 p.m.

Mr. Edward Short (Newcastle-upon-Tyne, Central): I apologise for not being in my place when the Leader of the House moved the motion, but I associate my right hon. Friend and myself with what I am sure the right hon. Gentleman said.
One of the engaging things about the Commonwealth is that we exchange these gifts on independence as a reminder of probably the greatest gift that this country has made to civilisation; namely, the dissemination of our ideas on parliamentary democracy. I hope that these gifts will help to perpetuate the links with the Commonwealth.
We all remember the Queen of Tonga at the Coronation. She wore her newest gown. The heavens opened and drenched everybody, but the Queen of Tonga lifted up our hearts. We are delighted to make this gift to Tonga and wish the country well in its new future.

Question put and agreed to.

Resolved,
That an humble Address be presented to Her Majesty praying that Her Majesty will give directions that there be presented on behalf of this House a gift of a Table to the Legislative Assembly of the Kingdom of Tonga and assuring Her Majesty that this House will make good the expenses attending the same.

To be presented by Privy Councillors or Members of Her Majesty's Household.

Orders of the Day — ADJOURNMENT

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Goodhew]

Orders of the Day — HEAVY GOODS VEHICLE DRIVERS

9.59 p.m.

Mr. W. E. Garrett: We move in a matter of seconds from the affairs of Tonga to nuclear tests and then to matters concerning the United Kingdom. My intention in this extremely short Adjournment debate is to draw attention to an anomaly concerning the

heavy goods driving licence and regulations contained in the Transport Act 1969.
The matter was drawn to my attention by a constituent of mine, Mr. J. W. D. Neale—

It being Ten o'clock, the Motion for the Adjournment of the House lapsed, without Question put.

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Goodhew.]

Mr. Garrett: I was saying, Mr. Speaker, that the matter was drawn to my attention by my constituent, Mr. Neale.
To outline the case I must draw attention to the circumstances which enveloped Mr. Neale through no fault of his own. Mr. Neale—a lorry driver—became redundant in March 1972 when unemployment was rising and trade was slack. His employers were unable to keep him in employment because of the shortage of work in my constituency in the North-East. Mr. Neale applied for a number of driving jobs. At that time there was a surplus of lorry drivers, especially those with heavy goods licences.
Mr. Neale was unsuccessful in obtaining employment. He is a good worker, and I have verified that he has a clean driving record extending back for more than 30 years.
Up to this stage the matter is fairly simple. It becomes rather complicated. As Mr. Neale was unable to obtain a job as a driver within six months, his driving licence automatically expired in accordance with a provision of the 1969 Act. To follow the employment in which he has spent most of his working life he must therefore obtain a new licence.
However, this is not possible. As Mr. Neale has been unemployed for more than six months his licence has expired. He must obtain a vehicle to take the test. He could not get a vehicle. He made inquiries about hiring a vehicle. At about this time last year the rate was £80 for two hours, plus a £6 deposit for the test. This is an astronomical sum to a man who has been out of work for all this time, and Mr. Neale could not raise it. He therefore approached the Traffic Commissioners for the Northern Region to ascertain whether he could appeal against this provision,


but the commissioners told him that the statute clearly provides that no appeal is possible.
Mr. Neale then approached the Department of Health and Social Security to ascertain whether it was possible to obtain a grant towards the cost of taking the test. The Department of Health and Social Security, after having contacted the Department of Employment, rejected Mr. Neale's application for a grant as his previous employer had offered to pay for the Class III test.
Mr. Neale rejected the offer of his former employers stating that if they wished to help him they should allow him to take the Class I test. That test would allow a person to drive an articulated vehicle. Without such a licence Mr. Neale's earning capacity and the skill he has acquired are lessened. Thus, there existed a situation in which Mr. Neale and many other drivers throughout the country through no fault of their own were debarred from earning a living in a profession in which they had spent most of their working lives.
With these facts in mind I wrote on 24th August to the Minister responsible for transport matters and in a courteous reply to me he emphasised the reason the heavy goods vehicle driving licences scheme was introduced on 2nd February 1970. He also stated that my constituent had been unable to satisfy the licensing authority for the Northern area that he had the necessary claim to enable him to have a heavy goods vehicle driving licence without a test. This statutory independent body has arbitrary powers and there is no appeal. My constituent cannot argue the claims of his skill to an appeal body.
In the same letter the Minister admitted that "the claiming rule" operates to the disadvantage of those who, like Mr. Neale, may through no fault of their own be on the wrong side of the borderline. The Minister however stated that the reason behind the decision to tighten up the qualification of licences was to increase the skill of the drivers and to improve safety. That is an objective which I, like the rest of the House, will endorse.
I asked the Minister, therefore, whether it was possible to seek an amendment to the law to ease the position, and he

stated that there was a three-year transitional period which had been agreed upon before any possible amendment could be considered. This was the view of the Ministry. With the situation as it now exists, the prospects for these people who have been put in a grim situation are difficult. Therefore, I must appeal to the Minister on four points. Even at this late stage, will he consider shortening the three-year transitional period? I should like him to ascertain whether it is possible to do something now for those people which will enable them to obtain work in a job of their own choice. I ask him, too, to work out an appeal procedure against the decision of the licensing authority and also to ascertain whether it is possible to seek the co-operation of the Road Transport Industry Training Board with a view to offering facilities for these men to undergo retraining.
I hope that the proposals that I have put to my hon. Friend tonight will be acceptable. My main object in raising this matter is to ensure that what on the surface appear to be anomalies can be corrected to the benefit not only of my constituents but of many people throughout the country.

10.8 p.m.

Mr. Julius Silverman: I shall not detain the House for more than a minute or two but I feel that I must support the plea made by my hon. Friend the Member for Wall-send (Mr. Garrett) in what I regard as an extremely important matter. He has mentioned one case. In my constituency I have been approached concerning at least three cases of the same problem—the problem of people who have been temporarily displaced from the driving of heavy lorries, in consequence of which their lorry licence has expired and they then find themselves without employment or having to take employment of an entirely different character. If there are three cases in one constituency, it is obvious that this must be a widespread problem causing hardship to a large number of people.
I agree entirely with my hon. Friend that road safety must be the pre-eminent consideration of the Minister. I am not complaining about that. It is part of the Act. I agree that heavy vehicles can be dangerous and that it is essential that the driver of a heavy vehicle should be


skilled and should not have lost his skill. There should, however, be a retraining scheme. After all, people are trained to be bricklayers and to work in the engineering industry. The Government have expanded their training boards. Why should there not be facilities for people who have already been in the industry, who have been skilled and qualified? If there is any question of a test, they should have the necessary training and have a heavy vehicle provided to take the test.
My experience is the same as that of my hon. Friend. I know that, when a person wants to take a test, he cannot obtain a heavy lorry unless he is already in employment and his employer is willing; otherwise it is extremely expensive for him. My hon. Friend spoke of a cost of £80. I have been told of a cost of between £60 and £80 to have a lorry for the necessary time.
I know that it is not a matter for the Minister, but provision for retraining should be made by the Secretary of State for Employment as part of the Government's retraining scheme. I hope that the Minister will discuss the matter with his right hon. Friend. The Road Transport Industrial Training Board should assist in such cases. They are also proper cases for the Government to intervene, providing the necessary training and vehicles, so that the road safety purpose of the Act is achieved but the people concerned are not driven out of employment in which many of them have spent the greater part of their lives.

10.12 p.m.

The Under-Secretary of State for the Environment (Mr. Keith Speed): I am grateful to the hon. Member for Wallsend (Mr. Garrett) for initiating the debate, and to his hon. Friend the Member for Birmingham, Aston (Mr. Julius Silverman) for taking part, because I know from my own postbag that the subject is of interest and concern to many hon. Members.
I think it would be helpful if I first referred to the statutory background which governs the subject of lorry drivers and the heavy goods vehicle drivers' licensing and testing system. This will show the hon. Member for Wallsend how it applied unfortunately to his constituent who fell the wrong side of the line.
Hon. Members will no doubt recall that a re-introduction of the former, pre-war, system under which a special vocational driving licence was needed for the driving of heavy goods vehicles—that is, rigid goods vehicles with an unladen weight of more than three tons and articulated vehicles—was foreshadowed in the Road Safety Act 1967, introduced by the previous administration. It was one of a number of measures in the Act designed to improve the safety record of heavy goods vehicles. As such, it commanded general support.
Essentially, the main principle was very simple—that anyone driving a heavy goods vehicle should be specially qualified and licensed. Two of the main qualifications were that applicants for these licences should be passed as medically fit for the job, which can, as we all recognise be quite physically arduous, and that they should prove their driving competence by passing a special driving test on a lorry. This test was, and is, intended to be much more searching than the ordinary "L" test, although that is, of course, adequate for its purpose.
But there was a difficulty. It was not possible to require every driver on whom the new requirement to hold this new special vocational driving licence was placed to undertake the new heavy goods vehicle driving test. Bearing in mind that there were some three quarters of a million such drivers, I am sure that the reasons for this are so obvious that I need not go into them in detail. To get over this difficulty, certain transitional provisions, which I will explain in detail because they are very relevant to the hon. Member's case, were adopted in the legislation introduced by the right hon. Member for Blackburn (Mrs. Castle), then Minister of Transport. These provisions are an adaptation of the provisions used when the scheme was first introduced in 1935. They are now to be found in Schedule 5 to the Road Traffic Act 1972.
The principle which the right hon. Lady adopted—I thought that it was a sensible one—was that the requirement to pass the new driving test should apply only to those who had not driven a lorry at all and to those without significant recent experience of lorry driving. That involved a definition of "recent". The formula adopted was that anyone who


was in the habit of driving lorries for an aggregate of six months in the year before the new requirement became operative was relieved of the need to take and pass the new driving test.
The vocational driving scheme was brought into operation on 2nd February 1970. As the hon. Gentleman said, anyone in the habit of driving a lorry to which the scheme applied for periods amounting to six months in the year ending 1st February 1970 could, on the basis of that experience, claim to be issued with a heavy goods vehicle driver's licence for the appropriate class of vehicle without test, although he would still have to have a medical examination to establish his fitness to drive.
I realise, as no doubt did the previous administration, that this rule meant that some people who might have had quite considerable experience of lorry driving in the past, such as the constituent mentioned by the hon. Member for Wallsend, would not have had any experience or enough of the right kind of experience in the year ended 1st February 1970 and would be unable to take advantage of the "claiming" arrangement.
I have some sympathy with anyone whose case falls, through no fault of his own, on the wrong side of the borderline. The real question is whether the line which was drawn in this case was a reasonable one. Parliament confirmed at the time of the 1967 Bill that it was. I obviously agree with that verdict. The justification for the waiver of the need to take the new test was recent driving experience on the kinds of vehicle to which the scheme applied when the scheme was introduced.
In that context I suggest that to set the governing period at one year was reasonable. Of course, wherever the dividing line had been fixed there would have been found to be hard cases falling on the wrong side of the line. That would have been so if the period had been set at two years, three years or even four years instead of one year. However, the principle remains and a dividing line there had to be. Bearing in mind the necessary criterion of recent experience when the scheme was introduced, I do not think that Parliament was wrong to set the period at one year.
Having explained the background, I now turn to the effect on individuals, such as those mentioned by the hon. Member for Wallsend and the hon. Member for Aston, who have been unable to benefit from the "claiming" rule because they did not have the required driving experience for six months in the relevant year.

Mr. Garrett: Was that required driving experience as seen through the eyes of the licensing authority?

Mr. Speed: No; the requirement was laid down clearly by statute. All that such people had to do was to prove that they were driving the required class of vehicle. That is not proof in the eyes of the licensing authority.

Mr. Garrett: Is proof required from the previous employer?

Mr. Speed: Simply reasonable proof that the appropriate vehicle had been driven at the appropriate time.

Mr. Garrett: Proof from whom? If it was proof from a previous employer, what check was made against the previous employer? My knowledge is that cart horses have been driven through the requirement of proof and that licensing authorities have not meticulously checked. There are cases which I can quote.

Mr. Speed: My information is that the licensing authorities checked. There may well have been some people who slipped through the scheme. It was up to the licensing authorities, which are statutorily independent—Parliament made them so—to be satisfied. I have not had examples brought to me of any abuse. If the hon. Gentleman or any other hon. Members have examples, I shall happily look into them. I shall do so whether it is a case of a loophole or a case of someone who had proof which was not accepted by the licensing authorities.
I now deal with the question of people who have been unable to benefit from the "claiming" rule because they have been in the process of changing jobs, because they have had the misfortune to have been ill or unemployed, or because they have been driving heavy vehicles which are used on roads only to a limited extent. There are some vehicles which are exempt.
I also propose to say something about training for the job of lorry driving, both generally and as regards those unfortunate enough to be unemployed—although this is a matter for my right hon. Friend the Secretary of State for Employment. But my Department and his are in close touch on this problem, and I will see that the references which the hon. Member has made which touch on my right hon. Friend's responsibilities are brought to his attention.
The first thing which I think the House will wish to note is that those who want a heavy goods vehicle driver's licence but cannot "claim" it under the transitional arrangements which I have explained are certainly not debarred, in law, from obtaining the licence they want. It is open to them to take, and pass, the heavy goods vehicle driving test. I appreciate, however, that this can present certain problems—not least in the sort of circumstances to which the hon. Member has referred—in relation to any training, or refresher training, which the driver or potential driver feels he needs to bring himself up to the standard in the test and in relation to the provision of a vehicle for the test, which is the responsibility of the person taking the test. I realise that there are financial implications, which can be considerable.
Leaving aside for the moment the question of the unemployed, the responsibility for providing or securing training for heavy goods vehicle drivers rests with industry itself. I must stress this as there have been suggestions that the Government should provide the necessary training. All employers of heavy goods vehicle drivers, whether in the road haulage industry or in other industries which operate heavy goods vehicles on their own account, have responsibilities in this connection. They must all assess their future needs for drivers and plan their recruitment and training programmes accordingly.
The Road Transport Industry Training Board has been active in organising group training schemes which offer assistance with training not only for the road haulage section of the industry but for employers in other industries. Training facilities, however, are provided to meet identified needs, and employers must make their needs known to the appro-

priate training boards. There is now evidence of shortages of qualified drivers of heavy lorries in some areas—not least in the West Midlands, which the hon. Member for Aston and I know about.
The problem of shortages is unlikely to be solved until all firms which need these drivers—and not just some of them—take steps to recruit and train or secure training to the standard of the heavy goods vehicle driving test. No operator can reasonably complain that he cannot get drivers—or the right kind of drivers—if he is not bearing his fair share of responsibility for training.
At the same time the demand for heavy goods vehicle driving tests has been less than my Department had estimated, and I understand that in some cases training facilities have been under-used.

Mr. Julius Silverman: These are training facilities provided by the employers' board. But this surely means that unless an employer is prepared to provide the facilities—to provide the vehicle for that test—the man has no chance of getting the vehicle for the test unless he can pay.

Mr. Speed: I would not say that he has no chance, but in essence what the hon. Gentleman is saying is right. I am trying to underline this point because it is important for the road transport industry as a whole.
These factors tend to confirm that there has been a tendency—more marked among some sections of the roads goods transport industry than others—to rely on recruiting drivers who already have full heavy goods vehicle drivers' licences. This situation cannot continue. The three-year transitional period for the scheme is now over and virtually all who can properly "claim" licences without tests have already done so.
I turn to those who are now unemployed and seek work as lorry drivers and need to take the heavy goods vehicle driving test in order to get the necessary vocational licence. Some of these people perhaps need the use of a lorry just for the purpose of taking the test—or perhaps for a short spell of refresher driving. Others, who may have had little or no recent lorry driving experience, may need a full training course.
Opportunities exist for both these categories. I understand that many prospective employers seeking to recruit lorry drivers are willing to allow their potential employees the use of one of their vehicles for the purpose of taking the test. We have had examples of this in my constituency. I hope that this will continue, and indeed will become the accepted practice. In fact, I think it will have to if employers are to obtain the drivers they need. I believe that this underlines what the hon. Member for Aston has said.
As regards those who need training, limited facilities are available for training the unemployed under arrangements made by my right hon. Friend the Secretary of State for Employment in conjunction with the Road Transport Industry Training Board. I recognise, however, that this scheme operates only where there are training vacancies and where there is an unsatisfied demand for drivers and an employer is willing to sponsor an unemployed man with a view to employing him subsequently and no suitable qualified men are registered as unemployed.
These are harsh conditions, as I appreciate. The scheme does, however, afford some help in the kind of cases to which the hon. Member has drawn attention.
The real answer to the problems of the experienced driver who cannot get a job because he cannot himself afford to bear the cost of qualifying for a heavy goods vehicle driver's licence rests in very great measure with those who need drivers. If nothing else, I hope that this message can go out to the industry from this debate. The industry can no longer always expect to recruit drivers already licensed. It must be prepared to provide or to secure training for recruits. The cost of refresher training for an experienced driver who still has to qualify for a licence is likely to be considerably less than that of training a newcomer from scratch or, indeed, the cost of hiring drivers on a short-term basis.

Mr. Garrett: Before the hon. Gentleman concludes his speech, in view of what he has said I should like to thank him for his remarks, which I am sure will be greatly noted by the road haulage industry.

Mr. Speed: I thank the hon. Gentleman. All of us are at one on this matter. Although the hour is comparatively late and the House is not crowded, I hope that this message can go out to the industry. I hope that the debate will be reported to those interested in road transport problems.
The licensing scheme which was introduced by the previous administration is now beginning to have an impact on accidents. After remaining constant for some years, the accident involvement rate of heavy goods vehicles fell by 16 per cent. in 1972, the second year in which the scheme has operated. The fall is attributable, at least in part, to this licensing.
At the same time, I know from the many letters which I have had in the Department that the licensing requirements have given rise to some hard cases. But the answer to this does not lie in making changes to the scheme introduced by the previous administration and carried on by the present administration. I believe that that would not be in the best interests of road safety. The difficulties are due not to any unreasonable demands of the scheme but to the fact that drivers themselves have been left with the problem of qualifying for their licence. That problem should be eased when employers generally take steps to train or to secure training for their recruits. Responsible employers are already doing this. I hope that those who are not doing so will read the report of this debate and will now, perhaps, bring in an overdue improvement in this sector.

Question put and agreed to.

Adjourned accordingly at twenty-seven minutes past Ten o'clock.